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A New York District Judge ordered the Securities and Exchange Commission and Elon Musk to settle their differences regarding a tweet by the Tesla CEO out of court.
“Take a deep breath, put your reasonableness pants on, and work this out,” Reuters quoted Judge Alison Nathan as saying during the hearing.
SEC took Musk to court after he tweeted that Tesla will manufacture half a million cars this year. The tweet, however, was quickly followed by another one, clarifying that “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.”
The watchdog immediately turned to the court system, asking Judge Nathan to hold Elon Musk in contempt for violating a deal the regulator struck with the Tesla chief executive last year, which requires him to get the approval of the Tesla board of directors before tweeting anything that could “be material to investors.”
In its filing to Judge Nathan, the regulator accused Musk of not asking the approval of Tesla’s board of directors for any tweets posted since the agreement was made. The watchdog said it had asked the Tesla board if the CEO had approached it for approving tweets, and the board responded in the negative.
“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.
Musk first drew the attention of the Securities and Exchange Commission with his tweeting habits last summer when the Tesla CEO said on Twitter he was planning to take the company private and had already secured funding.
It was this phrase, “funding secured”, that alerted the Securities and Exchange Commission, which launched a probe into this claim, prompting Musk to come forward with the revelation that he had for years been in talks with the Saudi sovereign wealth fund to take the company private.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.