Elon Musk faces US contempt claim for violating deal with federal regulator
WASHINGTON – The US Securities and Exchange Commission (SEC) on Monday asked a judge to hold Elon Musk, the CEO of electric vehicle maker Tesla, in contempt for violating a deal between him and the regulator on social media posts, local media reported.
Bloomberg News reported that the SEC alleged that Musk failed to abide by an Oct. 16 settlement with the agency "requiring him to seek pre-approval from Tesla Inc. for social media posts and other written communication that would be material to the company or investors."
The SEC cited an "inaccurate" tweet by Musk on Feb. 19 about the company's production, according to the report. The CEO said then that Tesla "will make around 500k in 2019."
He later followed up with a tweet clarifying his assertions, saying he "meant to say" that annualized production rate at the end of 2019 was probably around 500,000, or 10,000 cars per week.
Total deliveries for full-year 2019 are still estimated at 400,000, Musk tweeted. "He once again published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with Internet access," Bloomberg reported, citing court papers filed by the SEC in Manhattan federal court.
Musk agreed last year to pay 20 million dollars for his inaccurate tweet claiming that he had secured the funding to privatize Tesla.
That settlement deprived him of his role as chairman of the board but didn't go further to remove him as the chief executive.