Elon Musk says he should not be contemptuous of the court during a recent tweet about Tesla because he did not violate his settlement agreement and "there is no basis for expelling contempt sanctions against him," according to a new court filing. The filing says that Musk "properly used his discretion to decide that a tweet on February 19" did not contain information that could reasonably be considered material "to Tesla.
The current tweets are better understood as "proud and optimistic conversion of published information," says the filing. The filing also shows that Musk's tweets about annual production of Tesla came after the market closure. Furthermore, Musk has tried to comply with the settlement by tweeting less ̵
Musk is responding to a The Securities and Exchange Commission (SEC) filed on February 25, when the agency asked a federal judge to keep Tesla's CEO disdained, SEC said a tweet Musk sent on February 19 regarding the company's production target for 2019 violated the settlement between Musk and SEC last year. It's not quite clear what the outcome will be if Musk is held contempt.
SEC said in February that Musk ink cheated inaccurate information in the tweet about how many cars the company expects to do in 2019. Musk wrote that Tesla "will make around 500k [cars] in 2019," even though Tesla forecasts a maximum of 400,000 cars this year only a few weeks before. Musk followed up hours later with another tweet where he corrected and added that he meant to say that Tesla will make cars with a fast enough speed to get 500,000 a year. As the SEC investigated Musk's claims, the agency discovered that Musk had not run the tweet by a lawyer before sending it, a violation of the terms of the settlement last year.
Musk's lawyers say the correction tweet was unnecessary, since the original tweet on February 19 did not break his settlement. Tesla's advice went through the tweet after it was posted. "This was in accordance with the guidelines, which stipulates that Tesla will regularly review tweets after they are posted and provide feedback if necessary," wrote Musk's advice. Although Tesla and Musk did not tweet as material, he followed the tweet a few hours later "out of an abundance of caution." Tweets did not mean that the share price moved by market, writes the lawyers.  The settlement comes from when the SEC sued Musk in September of September to commit securities fraud, after the CEO announced in August that he had "funded secured" to take Tesla privately. Musk had only held some exploratory meetings with Saudi Arabia's public investment fund, and had no funding in place when he sent the tweet, which temporarily sent Tesla's share price sharply.
SEC opened a survey the next day and approached Musk with a settlement at the end of September, as Tesla's CEO agreed. The agency sued him in the southern district of New York on September 27. Two days later, Musk approved a settlement with more severe conditions. He was forced to go down as head of Tesla for three years, agreed to submit public statements (including tweets) with substantial information about the company to an internal lawyer for screening, and made a $ 20 million fine. Tesla was also fined $ 20 million and had to appoint two new independent directors to the board.
Musk spent the next few months dreaming the SEC, calling it "Shortseller Enrichment Commission," and said in an interview in December 60 Minutes that he still planned to tweet what he wanted. He added that while he respects the justice system, he does not respect the SEC.
The SEC said in its request to keep the Tesla CEO dismissed that this pattern of behavior showed that Musk "was not going to attempt to adhere to [terms of the settlement]." As happens, the SEC sees 60 Minutes and that interview was cited in the Agency's filing.
"While Musk claims to" respect the judicial system, "his conscious indifference to the observance of this court's final judgment shows otherwise," lawyers wrote to the SEC February.
However, Musken's lawyers characterize the SEC's interpretation of the settlement as an "unconstitutional force grip". Having lawyers review their tweets before sending them – the SEC interpretation of the settlement "would effectively prevent Musk from talking about any cases related to Tesla's business based on the topic alone," read today's filing. "Musk never agreed to and would not consent to such a sweeping gag order."