Elon Musk and the SEC Are Facing Off Next Month in Court
Author By Sophia VidaPosted on On April 4th, Tesla’s CEO Elon Musk and the U.S. Securities and Exchange Commission will be facing off in a Manhattan courtroom.
The purpose of the argument will be to see if Musk should be held in contempt over one of his tweets.
U.S. District Judge Alison Nathan scheduled oral argument on an SEC contempt motion for 2 p.m. EDT (1800 GMT). Both sides said they did not need an evidentiary hearing.
The SEC has accused Musk of violating his settlement with the agency from October of last year when he tweeted in February that Tesla could build around 500,000 vehicles in 2019.
The SEC alleges the tweet Musk had sent out to millions of followers did not receive advance approval from the electric vehicle maker.
Musk’s lawyers have defended the tweet by saying it was not material, and that it was a restated a target for Tesla that Musk had discussed publicly in January.
The settlement last fall had called for Musk and Tesla to each pay $20 million civil fines, and for Musk to step down as Tesla’s chairman.
The case is SEC v Musk, U.S. District Court, Southern District of New York, No. 18-08865.
“Tesla—which is best positioned to interpret its own policy—has affirmed to the SEC that Musk complied with the policy,” Musk’s lawyers wrote in a filing from Friday. “This is meaningful evidence that Musk has satisfied his obligations. The court can discharge its order to show cause on these grounds alone.”
“The SEC shows, through its selection of ten tweets, that no matter how innocuous, how well known, or how removed from the subjects mentioned in the Policy, because the tweet concerns Tesla, the SEC believes Musk must have them pre-approved,” Musk has written.
“These tweets, which include statements denying untrue rumors and repeating well-known safety information, prove Musk’s point. Since the Order was entered, Musk has not tweeted material information regarding Tesla.”
Disclaimer: We have no position in Tesla Inc. (NASDAQ: TSLA) and have not been compensated for this article.
