Musk's tweet violates legal pact, in hot soup with SEC

SEC says Elon Musk should be held in contempt for inaccurate tweet about Tesla

Elon Musk should be held in contempt of court, the US Securities and Exchange Commission has told a NY federal court after Tesla's mouthy CEO tweeted about the number of cars the company will roll out this year.

However, the SEC said his latest tweet breaches this agreement, claiming that Musk has "once again published inaccurate and material information about Tesla to his over 24 million Twitter followers". And the SEC argues the tweet ran afoul of an October settlement requiring Musk to seek pre-approval from Tesla lawyers before tweeting out potentially market-moving information.

In another tweet about four hours later, Musk said, "Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week".

The SEC cites the message tweeted by Musk on February 19 about Tesla's plans to manufacture 500,000 vehicles this year.

The SEC had sued Musk last September for using his Twitter account in August to announce he had secured financing for a potential buyout of Tesla - news that caused the company's stock to swing wildly.

The problem? He isn't supposed to tweet about things that could impact markets and his publicly traded company.

The latest news could re-open the long running debate. Tesla's stock rose by just $1.10, or less than 1 percent, the next day. In the settlement, Musk kept control of Tesla, but he was stripped of the title of board chairman and ordered to pay a $20 million fine.

Musk's first tweet on February 19 was not pre-approved, the SEC discovered and outlined in its filing with the court.

But the cult of personality has also had a downside for Tesla, with Musk sending the stock into a tailspin after antics such as smoking marijuana during a podcast interview or insulting analysts on a conference call.

Since agreeing to the settlement, Musk has repeatedly antagonized Wall Street's main regulator.

It also is not clear how Musk's public criticism of the SEC might weigh on his fate.

This included a clause that Musk had to seek Tesla's pre-approval of any written communications, including social media posts, that would be relevant to the company or its shareholders. And Musk's first tweet wasn't a verbatim restatement, the agency said.

The order by U.S. District Judge Alison Nathan in Manhattan came hours after the billionaire criticized SEC oversight as "broken", in the wake of the regulator's request on Monday night that he be held in contempt. "Who knows? ... Nobody's ideal".

Musk got even more pointed in December, when he told 60 Minutes "I do not respect the SEC".

Musk went on to say that "I do not respect the SEC ..."

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