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Musk's lawyers call the tweet in the SEC's contempt, not "materially"



NEW YORK (Reuters) – Elon Musk's lawyers said the US Securities and Exchange Commission failed to satisfy its great burden of showing that Tesla Inc.'s CEO was to be despised, and the tweet asked that the contempt of the contempt was both proper and "not material ".

FILE PHOTO: SpaceX founder Elon Musk looks at a post-competition conference after the SpaceX Falcon 9 rocket, carrying the Crew Dragon spacecraft, lifted off on a fuzzy test flight to the International Space Station of the Kennedy Space Center in Cape Canaveral, Florida, USA. March 2, 2019. REUTERS / Mike Blake

In a Friday filing in Manhattan's federal court, Musk's lawyers also said their client "respects their obligations" to the electric car company, its shareholders and the court.

Musk tries to avoid being disdained to break his scam in October 2018 with the SEC, to have tweeted at 19:15. EST February 19 to its over 24 million Twitter follower that Tesla could build around 500,000 cars in 2019.

SEC's spokesman Ryan White refused to comment.

Musk's settlement, including $ 20 million civil fines for both him and Tesla, resolved a SEC lawsuit over a August 7, 2018 Twitter post where Musk said he had "funding secured" to take his Palo Alto, California. based company private at $ 420 per share.

SEC said that Musk committed an "obvious" violation of the settlement by tweeting about Tesla's production view without first seeking approval from the company's lawyers.

In a Monday filing, the SEC went ahead and complained that Musk had never sought prior approval for some Tesla-related tweets after the settlement.

But in Friday's filing, Musk & # 39; s lawyers said that the SEC had admitted during negotiation talks that Tesla-related tweets were not subject to a wide-ranging pre-approval requirement.

They also said that the tweet was not material because it only mentioned old news, used generalities, was "ambitious and optimistic," and did not move Tesla's stock price.

"The main question is whether Musk meets Tesla's policy, not whether the SEC is happy with Tesla," says Musk & # 39; s lawyers. "Musk's belief that at 7:15 did not require prior approval was correct."

March 26 to tell US District Judge Alison Nathan if he wants a deliberate hearing about the certificate of conviction .The SEC has said no hearing is needed.

The October settlement demanded Musk to go down as Tesla's chairman. The discovery could give him a higher fine, further restrictions on his business, or even removal from Tesla's board or as CEO.

Tesla shares closed Friday at $ 9.49, or 3.5 percent, on They are 32 percent below their peak on August 7, after funding secured tweet.

The case is SEC v Musk, US District Court, Southern District of New York, No. 18-08865.

Reporting of Jonathan Stamp in New York, editing of G Cr osse and Diane Craft

Our Standards: Thomson Reuters Trust Principles.

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