Tesla Chief Executive Elon Musk shot back against US securities regulators on Monday, arguing at a filing that his recent tweet Concerning the electric Car maker’s production Quantity did not violate his fraud settlement and he cannot be held in contempt.
Musk’s”single, immaterial” tweet to his over 24 million Twitter followers claiming the electrical vehicle-maker would produce around 500,000 cars in 2019 also complied with company’s communication policy for senior executives, a state of the settlement, attorneys for the Tesla leader wrote in a filing in federal court in Manhattan.
The US Securities and Exchange Commission had asked the court to maintain Musk in contempt, stating his Feb. 19 tweet violated a September fraud settlement prevents him from sharing material information about Tesla on societal media without the company’s pre-approval.
“This contempt action, following Musk’s sincerely-held criticism of the SEC on 60 Minutes, additionally reflects concerning and unprecedented overreach on the part of the SEC,” the filing stated.
In December, Musk stated at a”60 Minutes” interview that:”I do not have regard to the SEC.”
The settlement involving Musk, Tesla and the SEC solved an SEC lawsuit over claims Musk created on Twitter in August he had”funds procured” to take Tesla private at $420 per share.
As part of that settlement, Musk stepped down as the company’s chairman and he and Tesla agreed to pay $20 million each in fines.
The renewed public battle between Tesla’s chief executive and the top US securities regulator adds stress on Musk, the public face of Tesla, who’s struggling to make the business profitable after cutting the price of its Model 3 sedan to $35,000.
Tesla has backed off a plan to close all its US stores and stated it will rather raise prices of its own high-value vehicles by about 3 percent on average.
From the filing, Musk’s lawyers said that his conversation was a”proud and optimistic restatement of publicly disclosed information”
Musk fixed his tweet four hours later to state the”annualised production rate” at year-end 2019 will probably be about 500,000, with deliveries expected to be about 400,000.
Additionally, Musk has exhibited self-censorship in radically reducing the quantity of tweets since the settlement, they wrote, adding that the SEC’s request, if allowed, would increase free speech issues.
“This self-censorship is reflective of his commitment to adhering to the Order and preventing unnecessary disputes with the SEC,” they wrote in the filing.
Musk called the regulator that the”Shortseller Enrichment Commission” on Twitter following the settlement, and tweeted that”something is broken with SEC supervision” only one day after the bureau began pursuing the contempt order.
Legal experts have said the SEC could pursue a number of paths, including a higher fine, imposing additional restrictions on Musk’s actions or removing him from Tesla’s plank or helm.
Tesla published a new communications policy in December for senior executives as part of their settlement. It involves Tesla’s general counsel and a recently designated in-house securities law attorney to pre-approve any written statements regarding Tesla that may be material.