SEC asks judge to hold Elon Musk in contempt

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

Musk tweeted on February 19 that “Tesla made 0 cars in 2011, but will make around 500k in 2019.” Hours later, Musk sent a follow-up tweet indicating that the company will actually deliver just 400,000 cars this year.

Although Musk corrected his mistake, regulators scolded Tesla’s billionaire CEO because he “once again published inaccurate and material information about Tesla to his over 24 million Twitter followers,” according to court papers filed Monday. The SEC noted that he did not ask for or receive company approval before publishing his tweet.

His October 2018 settlement with the SEC mandates that he receive pre-approval of any social media posts with information that’s “material” to shareholders. Tesla agreed to establish a board committee to oversee those posts.

In a court filing, Tesla conceded Musk did not receive pre-approval for his posts, but the company claimed that he didn’t need it. Tesla said the language he used was based on information the company made public 20 days earlier during its January 30 earnings call with Wall Street analysts.

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