Daily Management Review

Elon Musk tweets about Tesla, gets in trouble with SEC again


02/27/2019


The US Securities and Exchange Commission (SEC) appealed to a New York court, seeking recognition of Head of Tesla, Elon Musk, guilty of contempt of court. According to the SEC, plans for the production of Tesla electric vehicles for 2019, quoted by Mr. Musk on his Twitter account, “can lead investors into a mistake”, and their publication violates an agreement with the regulator.



Heisenberg Media
Heisenberg Media
In a statement to the New York Court, the US Securities and Exchange Commission refers to a publication of Tesla's head Elon Musk on Twitter, made by him on February 19. “In 2011, Tesla produced 0 cars, and in 2019 produced about 500 thousand cars,” he said. The regulator claims that such statements are misleading investors and violate terms of the agreement concluded by the SEC and Elon Musk in October last year and approved by the court.

If the court finds Tesla’s Head guilty of violating terms of the agreement and contempt of court, he will face a large fine or even imprisonment.

The above-mentioned agreement between the SEC and Head of Tesla was signed after a scandal in August last year, caused by Mr. Musk’s tweet about allegedly possible withdrawal of Tesla from the exchange and turning it into a private company. These statements first caused a rapid growth of Tesla shares on the stock exchange - by 10%, and then the same sharp drop. The American regulator suspected Head of Tesla in an attempt to manipulate stock prices and, after thoroughly investigating this case, accused him of fraud. After lengthy negotiations, Tesla's Head managed to conclude an agreement with the SEC, under which he agreed to leave his for three years, pay a fine of $ 40 million, and not publish important information about the company without approval of the regulator. The agreement between the parties was approved by the District Court of New York.

According to the SEC, lawyer of Elon Musk confirmed the fact that the tweet about production plans was not agreed with the regulator. However, a few hours after the publication of this tweet, Head of Tesla considered it necessary to add a clarification. “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.”, he explained. But the SEC is not taking into account this clarification in its application to the court.

Mr. Musk himself sees no reason to charge him for violating the terms of the agreement. According to him, the same data was indicated in the official statements of Tesla, published in January. But Tesla shares during electronic trading on the NASDAQ exchange still fell by 3.6% amid these events.

source: cnn.com






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