Daily Management Review

US SEC Tells Court Tesla CEO Musk Never Sought Any Pre Approval For His Tweets On Tesla


03/19/2019




The United States Securities and Exchange Commission has alleged in court that despite and since a court-approved agreement with the US based the electric vehicle maker Tesla’s chief executive Elon Musk was reached about the manner of communication of important information about the company, Musk has not cared to seek sought pre-approval for even a single of his tweet about Tesla.
 
The SEC is intent on implementing the demand of the US government to make Musk liable for contempt of court for a previous fraud settlement that mandated the Tesla CEO to have any of his tweets about the company which had the potential of having any material impact on the company to get pre approved by the company.
 
Even while Musk, who is also the public face of Tesla, is under pressure over his failed attempts to make the company profitable following the reducing of the price for its Model 3 sedan to $35,000, the ongoing spat between the CEO and the SEC is increasing pressure further on Musk.
 
The SEC referred to a previous tweet by Musk on 19 February, who has more than 24 million Twitter followers, wherein he claimed that Tesla would build around 500,000 cars in 2019, and claimed that the tweet was “a blatant violation” of the court ordered agreement.
 
According to the filing in federal court in Manhattan, Tesla was asked in late February whether it had received any requests from Musk to get his tweets pre approved by the board of the company since the agreement was reached. 
 
The simple answer from Tesla, after a two week delay, was a “No.”
 
“It is, therefore, stunning to learn that, at the time of filing of the instant motion, Musk had not sought pre-approval for a single one of the numerous tweets about Tesla he published in the months since the court-ordered pre-approval policy went into effect,” the SEC said in the filing.
 
Tesla had not got pre approval for tweets form Tesla that materially impacted the company and therefore the CEO was in violation of the fraud settlement agreement that was struck in September last year, alleged the regulator last month.
 
Musk in response had argued that he had complied to the settlement by his “single, immaterial” tweet and that the SEC was infringing his freedom for free speech by pushing to find him in contempt of the settlement agreement. 
 
Lawyers for Musk said the company’s communication policy for senior executives was complied for by the tweet and was a “proud and optimistic restatement of publicly disclosed information.”
 
However the SEC argued in the Monday filing that it was not only those tweets that were deemed material by the regulator’s standards, but a whole range of Musk’s of comments on tweeter are included in the pre-approval policy agreed in the settlement.
 
On Twitter, the SEC was called the “Shortseller Enrichment Commission” by Musk following the settlement and then tweeted just a day after the agency started pursuing the contempt order that there was “something is broken with SEC oversight”.
 
(Source:www.firstpost.com)






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