Tesla CEO Elon Musk and the United States Securities and Exchange Commission (SEC) are now once again at each other's throats. This time, the agency has formally asked a federal judge to hold Musk in contempt for allegedly violating the terms of their settlement deal. The SEC claimed that the CEO's recent post on social media was a clear violation of what they had agreed upon in October of last year.
Musk posted a tweet on his account on February 19th, which stated that the company will be making around 500,000 cars in 2019. The billionaire then corrected his tweet just moments later and said that Tesla will actually be able to deliver just 400,000 cars this year. Despite correcting his mistake, the SEC immediately reprimanded the CEO for once again publishing inaccurate information. The SEC mentioned that tweeting false information is against their agreement and it could very well influence the company's stock prices given that Musk currently has 24 million followers on the social media platform.
Musk responded to the SEC's court filing and mentioned that he had only tweeted data that was already made public more than 20 days prior to the post. The data he was referring to was Tesla's report on its last earnings call held in January.
Musk then posted a tweet proclaiming how embarrassing it must be for the SEC to have neglected to read the transcript for his company's latest earnings report. Musk also indicated that the transcript clearly stated that the company would make around "350,000 to 500,000." SEC officials dismissed Musk's statements and mentioned that Tesla mentioned that it would build 500,000 cars and not vehicles in total.
The SEC also noted that Musk did not seek pre-approval for his post from the company, which was mandated in their settlement agreement. According to the agreement, Musk has to seek pre-approval for any social media post that will include information and data that would affect shareholders and the company's stock prices. Even if the data posted was verbatim, Musk would still have to seek approval. A committee within Tesla was even created for this sole purpose.
If Musk is found guilty of violating his agreement with the SEC, he will be fined up to US$1,000 per day from when the complaint was filed up to when the court finds that he is in full compliance. Following the filing of the court papers by the SEC, Tesla's stock dropped down by 3 percent.
