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Home / Business / Judge orders Elon Musk and SEC to settle Tesla's tweet dispute

Judge orders Elon Musk and SEC to settle Tesla's tweet dispute



SEC took him to court for the second time after he tweeted a picture of Tesla's facility and followed up with saying that the automaker will produce 500,000 cars in 2019. He corrected himself in another follow-up and managed that 500,000 are just the expected production rate. Tesla still expects to deliver 400,000 vehicles for the year, which is in line with previous guidance. Clearly, his clarification was not enough for the SEC.

Musk had to go down as Tesla leader and pay $ 20 million in punishment the first time the Securities and Exchange Commission filed a case against him over tweets about taking Tesla private. The agency said his proclamation that the company already has the funding to take the automaker private, constitutes fraud to be "false and misleading."

While this lawsuit also attempted to ban performers from serving as an officer in a public company, Musk's agreement with the SEC was eventually allowed him to retain his role as Tesla's CEO. Also part of that deal? Have tweets that contain material information about Tesla's car production pre-approved by one of the company's lawyers.

The Commission said that by tweeting the 500,000 production prospects for the year, Musk shared "inaccurate and material" data, one that was not "reviewed by Tesla's lawyers. However, Musk claimed that he had the right to decide whether a post needed prior approval. and that the current tweet was immaterial to the shareholders. He said in a statement given to Reuters :

"I have great respect for Judge Nathan and I am happy with her decision today. The current tweet was true, regardless of the shareholders, and in no way a breach of my agreement. "

Judge Nathan gave both parties two weeks to hammer a deal. If they still do not reach one then it is when she will decide her decision. In case Musk is found contempt, he may be required to start sending regular reports on how Tesla's attorneys monitor their tweets SEC lawyer Cheryl Crumpton also sees the possibility of imposing higher fines when Musk said that the $ 20 million fine he had to pay for the first time was "worth it."


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