Patrick Pleul/Pool via REUTERS
According to reports, the US Securities and Exchange Commission (SEC) does not want to bring Elon Musk back to court over some Tesla Twitter posts. The regulator has not taken Musk to court to enforce the 2018 deal since the judge told the parties to 'work this out' in 2019.
Reuters said four people with knowledge of the matter said the U.S. Securities and Exchange Commission declined to take further action on Elon Musk's tweets in 2018. This decision mainly followed after the court hearing in the case, held in April 2019, did not bring them the desired result. The SEC then asked the court to hold Tesla's CEO in contempt, stating that his tweet, which forecasts production at the carmaker, violated a court agreement signed by Musk in 2018 after Tesla's privatization tweet. Judge Alison Nathan did not conclude whether the tweets were material, or rule on the contempt motion, saying: “My call to action is for everybody to take a deep breath, put your reasonableness pants on, and work this out.”
Trying to control what the head of Tesla says and writes, the SEC has come into uncharted territory. SEC rules require public companies and their executives to disclose accurate information that may be material to investors through channels that investors know to monitor. However, they do not specify exactly how companies should do this.
“The 2019 remarks by judge Alison Nathan – who found the terms of the agreement between Musk and the SEC to be “soft” and urged them to reach an understanding – knocked confidence among officials overseeing the case that the courts would support them if they attempted to prosecute his activity on Twitter, the four sources said,” Reuters wrote.
An analysis of the documents and interviews with people familiar with the situation showed that after the judge's comments, SEC officials decided to urge Musk to comply with the terms of the agreement, rather than pursue its enforcement through the courts.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.