Elon Musk Responds To SEC's Allegation, Saying That He Did Not Violate Anything

Dhir Acharya - Mar 27, 2019

As in a filing in Manhattan federal court, Elon Musk also said that the request to hold him in contempt is based on the order’s radical interpretation.

In response to the allegation by the US Securities and Exchange Commission over a recent tweet, Elon Musk argued on Friday that his tweet didn’t violate the agreement that he signed with the SEC. As in a filing in Manhattan federal court, Tesla CEO also said that the request to hold him in contempt is based on the order’s radical interpretation.

Previously, the SEC requested the judge to hold Elon Musk in contempt due to a violation of a settlement agreement signed in 2018 after his infamous tweet about funding secured. According to the agreement, Musk has to get pre-approval from Tesla’s board before he posts any information on the social network that is considered material to investors.

While claiming that he did not violate the settlement agreement, Musk said the problem lies in the misinterpretation of the SEC, which was “virtually wrong at every level.” In addition, the filing reveals more details about the negotiations between the SEC and Musk. It’s worth noting that the SEC sent the CEO a draft agreement in which it requires him to get consent for every public statement involving Tesla, regardless of the format.

Tesla and Musk never agreed to those terms. Musk claims that the agreement asks him to follow Tesla’s policy that requires written communications containing or reasonably containing information important to the firm or its shareholders to get pre-approval.

The February 19 tweet

Elon Musk’s court filing is the latest update on the dispute between the SEC and the billionaire entrepreneur. The trouble began in August 2018 after the CEO tweeted that he had “funding secured” for taking the company private at $420 per share. Then, in September, the Commission filed a complaint to the federal district court accusing Musk of lying.

The case was settled with Tesla agreeing to pay $20 million of fine and Musk stepping down as the Tesla chairman for at least three years.

But last month, the dispute surfaced again when Musk tweeted on February 19 that in 2019, Tesla would make about 500,000 cars with later clarification that he meant the annual production would be 500,000 by year-end.