SEC asks judge to hold Elon Musk in contempt

San Francisco: The Securities and Exchange Commission has asked a US federal judge to hold Tesla CEO Elon Musk in contempt for violating a settlement deal reached last year.

The development on Monday comes in response to Musk’s tweet on February 19 that “Tesla made 0 cars in 2011, but will make around 500k in 2019”. Hours later, the billionaire sent a follow-up tweet indicating that the company will actually deliver just 400,000 cars this year, CNN reported.

Although Musk corrected his mistake, regulators slammed the Tesla CEO because he “once again published inaccurate and material information about Tesla to his over 24 million Twitter followers”.

The SEC on Monday noted that he did not ask for or receive company approval before publishing his tweet.

According to an October 2018 settlement with the SEC, Musk needs to receive pre-approval of any social media posts with information that’s “material” to shareholders.

Tesla, in response, agreed to establish a board committee to oversee those posts.

The SEC said in court papers on Monday that Musk had not “made a diligent or good faith effort” to comply with the settlement.

The court filing sent Tesla’s stock down more than 4 per cent in after hours trading.

On Monday night, Musk tweeted that the SEC “forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing”.

If a court finds Musk violated the settlement, the billionaire could face fines of up to $1,000 per day from when the court issued the order until it rules that he was in full compliance.