Musk never sought approval for a single tweet, securities regulator tells judge

  • Musk never sought approval for a single tweet, securities regulator tells judge

Musk never sought approval for a single tweet, securities regulator tells judge

Chief Executive Elon Musk has never sought pre-approval for a single tweet about Tesla since striking a court-approved deal about how to communicate important information about the electric vehicle maker, the top USA securities regulator told a judge on Monday.

"It is therefore stunning to learn that, at the time of filing of the instant motion, Musk had not sought pre-approval for a single one of the numerous tweets about Tesla he published in the months since the court-ordered pre-approval policy went into effect", the SEC said in the filing.

That order stems from a settlement reached between the SEC and Tesla in September over Musk's now-infamous "funding secured" tweet a year ago in which he said he was prepared to take the company private at $US420 per share. But Musk didn't have the funding secured.

The SEC, citing Musk's own words, accuses him of not doing that and says "there was never any good faith effort to comply with the Court's order".

The case is U.S. Securities and Exchange Commission v. Musk, 18-cv-08865, U.S. District Court, Southern District of New York (Manhattan). The SEC said no hearing is necessary on the matter "because there appear to be no disputed issues of material fact".

The barbs continue to be thrown over Elon Musk's tweeting.

The SEC accuses Musk of failing to have his tweets vetted and, instead, "unilaterally" deciding what is material information. It called for Tesla's general counsel and a newly designated in-house securities law attorney to pre-approve any written statements about Tesla that could be material. But the SEC said enforcement of the order is up to the judge, who has broad powers to enforce court orders.

"Such brazen disregard of this court's order is unacceptable and unworkable going forward", the SEC said in the filing. Also, Musk has regularly published tweets with "substantive information" about the company and its business, the SEC contended.

Anyway, it turns out Musk apparently hasn't had any of his tweets vetted, according to a filing submitted by the SEC late on Monday.

John Hueston, a lawyer representing Musk, wrote to U.S. District Judge Alison Nathan, requesting permission to file a response by March 22.

Legal experts say it's unlikely that Musk will be punished severely, but the commission wants to get on the record that Musk violated the terms, to prepare for any future violations.

The unveiling of the Model Y electric crossover was a more subdued affair than some of Musk's past performances, and Tesla's customer-deposit strategy rekindled concerns about the company's cash position. Tesla's stock rose by just $1.10, or less than 1 percent, the next day.