Tesla shares fall on report SEC asks judge to hold Elon Musk contempt for breaking agreement
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Elon Musk, co-founder and CEO of Tesla Inc., speaks during a revealing event for Boring Co. Hawthorne test tunnel in Hawthorne, California, USA, Tuesday, December 18, 2018. [19659004] Shares in Tesla fell 5 percent after the SEC asked a judge to hold Elon Musk contempt for breaking his deal. SEC cited an "inaccurate" February 19 tweet about production, Bloomberg reported first.
Musk:" Tesla made 0 cars in 2011, but will make About 500k in 2019 "
On that day, Elon Musk tweeted – then revised – Tesla production number year-round forecasts.
CEO said Tesla would produce "around" 500,000 cars this year, and prepare about four hours later to "say" that the company's annual production rate at the end of 2019 could be around 500,000 cars – or a production speed of 10,000 cars per week. Total deliveries for the year are still estimated at 400,000, Musk says. [19659009] "Musk did not attempt or received pre-approval before publishing this tweet, which was Inaccurate and communicated to over 24 million people, "SEC wrote in court filing.
The Securities and Exchange Commission settled costs with Musk and Tesla over the CEO's suspended bid to take the company Private this fall, with the billionaire remaining as the helm to the company but relinquishes its leader's title and gets slapped with a $ 20 million fine. As part of the settlement, Musk was to receive prior approval for future tweets.
but SEC writes: "In response to SEC's February 20 request for information, Musk and Tesla say that since Tesla's policy was implemented in December 2018, Musk & # 39; s tweets have been reviewed after its publication, but there is nothing suggestion that Musk has applied or obtained prior approval of any tweet prior to publication. "
The Agency concludes:" For all the reasons stated, SEC requires that the Court take a
order to show the reason why Defendant Elon Musk should not be disdained by the Court's final judge on October 16, 2018. "SEC's enforcement action is the next step in a story that began in early August when Musk announced via Twitter that he had secured enough funding for a massive private buyout. by Tesla. The SEC complaint alleged that Musk issued "false and misleading" statements and failed to properly inform regulators of material company events. Under the terms of the agreement, Musk and Tesla neither admit nor deny the wrongdoing alleged by regulators.
"This case confirms an important principle reproduced in our information-based federal securities laws," SEC's chief executive Jay Clayton said in a statement in September. 19659009]. Especially when companies and corporate insiders make statements, they must act responsibly, including attempting to ensure that the statements are not false or misleading, and do not omit information that a reasonable investor will consider important to making an investment decision, "Clayton added.
