Never write. This was the SEC's boost action taken late on Monday when the US Securities Observer requested the federal judge to hold Tesla Elon Musk CEO in contempt of court for a brief series of tweets he published last week. from the February 19th publication by the Twitter-loving CEO who wrote, "Tesla has made 0 cars in 2011, but will make about 500,000 in 2019." About four and a half hours later, Musk corrected himself "I had to say the annual production rate at the end of 2019 probably around 500,000, 10,000 cars / week. Deliveries for the year are estimated at around 400 thousand. "
Regular tweaking of Twitter on Twitter may not be a big deal. But Musk is the head of a publicly-traded company and, more critically, has reached a $ 20 million deal with the SEC over its twinning only last September. As part of this agreement, Tesla (who also paid $ 20 million for Musk reinsurance) agreed to set up a preliminary approval process for all of its senior management communications with shareholders, including tweets. (The agreement also forbids Musk from serving as chairman for at least three years and has since been filled out by former Australian telecoms executive Robin Denholm.)
In court documents filed today, the SEC has published a series of communications with the lawyer of Musk, in which lawyers of power generators admit that the twisted message of February 1
The production alarmed Tesla's legal team. In response to an email sent to the SEC on February 20, Tesla reported that when the Musk's lawyer's monitoring attorney saw his initial tweaks about vehicle production, he "immediately arranged to meet Mr. Musk in the Fremont plant ". According to the e-mail, Musk and the attorney have worked to prepare explanatory subsequent publications. The e-mail between Tesla and SEC also notes that Musk's initial tweet is "quite out of the NASDAQ trading hours." (The market closes at 4am Eastern time, Musk sends two tweets respectively at 19:15 and 11:41 pm).
What does it mean if Musk is in contempt of court? The punishment will be the federal judge, says Peter Havels, a lawyer at the law firm Pepper Hamilton. "If the DKK has an advantage, it is highly probable that the District Court will appeal to Mr Musk and put it on a short strap, with a strong warning that other violations may lead to Mr Musk forbidding for a certain period of time as an officer or director of a public company, "says Havel.
Havel also says that SEC seems to have a strong case. "The SEC took the time to gather evidence from Tesla before submitting its offer," he says.
The village itself publishes a Musk tweet sent in August 2018 stating that it plans to take Tesla private, and that he soon admitted that he did not actually provide funding for the plan, and Tesla announced that will remain public. The stock price is tumbling. In September the SEC called Musk and Tesla for "false and misleading statements"; Musk and the company settled the case in two days. Tesla is still faced with a lawsuit filed in August by shareholders claiming that the "provided funding" costs them money
Musk has a long history of antipathy to the SEC. In October, even after settling with the federal agency, Musk called him a "Commission to Enrich Short Sellers" in a tweet. (Musk also has a long history of antipathy with those who cut off his company's shares.)
And in December Musk told CBS 60 Minutes that he did not respect the SEC. He also said his only tweets to be reviewed were those that could move the company's share price. When the interviewer asks how Tesla can know what tweaks he will do, Musk said, "Well, I guess we can make some mistakes. Who knows? "The exchange is quoted in the SEC's request for indictment as a proof that" Musk has not made a diligent or bona fide attempt to fulfill "the terms of its settlement.
In the hours after the SEC submitted his proposal, Mukk took – what else? "The SEC forgot to read Tesla's transcription of earnings, which clearly shows 350k to 500k. How awkward … 🤗 – he wrote. Tesla's representatives did not respond to a request for comment.
Just last week, Tesla's Advocate General Dane Butvinkas left his job after just two months of work. It is believed that the esteemed lawsuit was hired to represent the company in its securities transactions. Bloomberg reports that Butsvinkas has left "due to poor cultural attractiveness to Tesla and the desire to return to full-time testing practice."
Alex Davis contributed to the report.
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