April 25, 2024
Tesla failed to stop Musk tweets, says regulator
Tesla has allegedly repeatedly failed to pre-approve Elon Musk’s tweets, despite the rules of a court order.
In 2018, the US Securities and Exchange Commission (SEC) accused Mr Musk of misleading investors, after he made claims about taking Tesla private.
An agreement was made requiring Tesla’s lawyers to pre-approve certain tweets.
But documents obtained by the Wall Street Journal suggest the regulator believes Mr Musk and Tesla have broken the terms of that deal.
According to the newspaper, the SEC wrote to Tesla alleging that Elon Musk’s Twitter account had violated the deal twice.
One tweet made claims about Tesla’s stock price “being too high”, while the other made claims regarding the company’s solar roof production.
One of the terms of the settlement was that Tesla’s lawyers must pre-approve tweets that relate to things such as production numbers, new products and the company’s finances.
When Elon Musk was reprimanded by the SEC in 2018 and forced to submit sensitive tweets to Tesla’s lawyers in future, did anyone think that would really work?
The man who had tweeted: “Am considering taking Tesla private at $420. Funding secured” – without having that funding tied down – seemed unlikely to change his spots. And so it has proved.
The tycoon has in fact become even more incontinent and prolific in his tweeting, whether it is raging about the Californian authorities for wanting to shut his factory at the beginning of the pandemic, propelling shares in Gamestop higher amid the speculative frenzy around the company, or helping turn Dogecoin from a joke into a crypto-currency success story.
To be fair, he has been more careful in his tweets about his own companies, though predictions about Tesla’s self-driving capabilities or the progress of his brain interface project Neuralink may have raised eyebrows.
But it’s the Musk effect – the fact that any tweet about a quoted company or crypto-currency can send its value soaring – which must worry the SEC.
Short of ordering the volatile entrepreneur to close his Twitter account, however, it’s not clear what the watchdog can do.
Tesla told the SEC it believed Mr Musk’s contentious tweets were not covered by the agreement, since they were “aspirational” or opinion, the Journal reported, citing documents obtained using a Freedom of Information request.
The SEC disagreed, the newspaper’s documents show.
“In the face of Mr Musk’s repeated refusals to submit his covered written communications on Twitter to Tesla for pre-approval, we are very concerned,” the SEC wrote.
It urged the company to “reconsider its position” and enforce controls and procedures “to prevent further shareholder harm”.
Following accusations of misleading investors in 2018, Mr Musk was forced to resign as chairman of Tesla as a result, and he was fined $20m (£14.1m).
Mr Musk did not admit any wrongdoing.
In an interview with news channel CBS at the time, he said he had “no respect” for the SEC, but he had chosen to pay the settlement fine because he believed in the justice system. – bbc.com
