The ongoing back and forth between the U.S. Securities and Exchange Commission and Tesla CEO Elon Musk and the company came to a head in court filings in Manhattan Friday and earlier today with Musk’s attorneys contending he did nothing wrong.
The SEC believes the brash leader of the California-based electric vehicle maker is in contempt of court for a tweet he published on Feb. 19 that the company could build about 500,000 vehicles in 2019. Musk did not get the tweet reviewed by the company’s legal team before posting it.
The agency called it a “blatant” violation of the fraud settlement agreement the sides agreed to last year. In addition to getting “material” tweets cleared he and Tesla each paid $20 million fines and he gave up his title as Chairman of the company.
Musk’s lawyers said the SEC failed to satisfy its burden of showing that the CEO should be held in contempt because tweet prompting its motion was both proper and “not material.”
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In the filing Friday in federal court, Musk’s lawyers noted he “respects his obligations” to the electric car company, its shareholders and the court. SEC spokesman Ryan White declined to comment, according to Reuters.
However, the SEC isn’t quite ready to conceded. In a filing earlier today, it complained that Musk has never sought to have any of his tweets approved by Tesla lawyers in the wake of the settlement.
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The Friday filing may have already squelched this issue as it notes that SEC lawyers conceded during the settlement negotiations that Musk’s tweets about the California-based EV maker were not subject to a wide pre-approval requirement.
Futhere, they also said the tweet was not material, largely restating previously released information, was non-specific and considered “aspirational and optimistic.” Perhaps most importantly, it did not move Tesla’s share price.
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“The key question is whether Musk complied with Tesla’s policy, not whether the SEC is satisfied with Tesla’s policy,” Musk’s lawyers wrote. “Musk’s belief that the 7:15 tweet did not require pre-approval was correct.”