Elon Musk: The Court Case with SEC.
There is an ongoing case between Elon Musk and the Securities and Exchange Commission which has headed to a new stage: A federal judge has set a date for hearing the SEC’s contempt suit against the Tesla CEO.
U.S. District Judge, Alison Nathan said she will hear the case on April 4 in Manhattan. The SEC is charging Musk with violating the terms of a settlement in which he agreed to receive approval before tweeting or making other statements about Tesla’s business on social media outlets.
“Tesla made 0 cars in 2011, but will make around 500k in 2019,” Musk tweeted. Later that day, Musk revised his estimate and tweeted that Tesla’s “Deliveries for (the) year still estimated to be about 400k.”
Based on those tweets, the SEC sued Musk for contempt, arguing that he broke the terms of this past fall’s agreement. In its suit, the SEC said that Musk “once again published inaccurate and material information about Tesla to his over 24 million Twitter followers.”
Musk and the SEC have been going at each other to various degrees since September, when the SEC brought fraud charges against Musk and sought to remove him from running any public company in the United States. The SEC charges at that time stemmed from Musk’s plan to take Tesla private for $420 a share, and how he had tweeted that he had “funding secured” for the idea, yet failed to provide in-depth financing details about the proposal.
Musk eventually withdrew his plan to take Tesla private. Just days after the SEC brought charges against Musk, the two reached a settlement that allowed Musk to remain as Tesla’s CEO, but required him to step down as the company’s chairman for at least three years. Musk and Tesla also agreed to pay a fine of $20 million each, in addition to Musk agreeing to get pre-approval for his tweets and other statements about the company.
While Nathan will hear the case next week, she is not under any obligation to make a ruling at that time. Musk could face anything from being removed from his CEO position, to a fine and more severe restrictions on his use of social media. It’s also possible that Nathan could void the settlement between Musk and the SEC, which could potentially open up Musk to further securities charges.