Elon Musk and SEC settle dispute over Telsa boss’s tweets
The agreement must now be approved by a US district judge.
Elon Musk and US securities regulators have settled their dispute over the Tesla boss’s tweets, with Mr Musk agreeing to having his future communications regarding the electric-car maker pre-approved by a company-employed expert.
The Securities and Exchange Commission (SEC) and Mr Musk reached the agreement, which they detailed in filings on Friday in federal court in Manhattan.
The agreement must be approved by US District Judge Alison Nathan, who has presided over the case.
The deal means Mr Musk would no longer face the threat of being held in contempt as the SEC has demanded.
The agency had alleged that Mr Musk violated a previous settlement requiring his tweets to be approved by a lawyer if they disclose important company facts.
The SEC said Mr Musk violated the deal with a February 19 tweet about Tesla vehicle production that was not approved by the company’s “disclosure counsel”.
The agency contended that Mr Musk had not sought the lawyer’s approval for a single tweet.
Mr Musk’s lawyers contended his tweet that Tesla would produce about 500,000 vehicles this year did not need approval because it was not new information that would be meaningful to investors.
They said the SEC was violating Mr Musk’s First Amendment rights to free speech.
The new agreement requires Mr Musk to get approval in advance from “an experienced securities lawyer” employed by Tesla, which is based in Palo Alto, California, before he issues any written communication on a wide range of financial topics.
It is more specific and detailed than the previous accord regarding the affected topics. Those range from Tesla’s financial condition and results through potential mergers, sales numbers, new business lines and changes in control or top executive positions.
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
Word of the agreement came one day after Mr Musk and the SEC lawyers told Ms Nathan they were still trying to work out an agreement and needed an extension of their deadline, to Tuesday.
The original case goes back to a settlement reached last September after Mr Musk tweeted that he had secured the funding to take Tesla private at 420 dollars a share — a substantial premium over the company’s stock price at the time — when he did not.
That tweet, last August, sent Tesla’s stock on a wild ride. The SEC maintains it hurt investors who bought the stock after the tweet but before they had accurate information.
Mr Musk later backed off the idea of taking the company private, but the regulators concluded he had not lined up the money to pull off the deal.