SEC Seeks Further Action against Elon Musk for Failure to Obey With Earlier Twitter Settlement

SEC Seeks Further Action against Elon Musk for Failure to Obey With Earlier Twitter Settlement

In defiance of an October settlement with the U.S. Securities and Exchange Commission, Elon Musk did not have his tweets pre-approved by an official Tesla babysitter, the SEC says in lately filed court documents. The SEC began examining its options for disapproval after Musk tweeted what he called a “celebratory” outlook on Feb. 19, a social media post that the SEC would begin calling the “7:15 tweet.” The 31-page filing covers language from the SEC which shows an assumed violation of a previous settlement between Musk and the regulatory body and advises the CEO never actually took the settlement seriously. Last week, Musk said the SEC was trying for an “unauthorized power grab” that “smacks of retaliation and censorship” and would interrupt his rights to freely tweet. SEC officials, in a lengthy response Monday, showed they were not backing down, calling again for Musk to be found in disdain of court.

In a filing submitted Monday evening, attorneys for the federal agency wrote it was “stunning to learn” that “Musk had not pursued pre-approval for a single one of the many tweets about Tesla he issued in the months since the Court ordered pre-approval policy went into effect” (The SEC lawyers also protested in the filing that “it took more than two weeks for Musk and Tesla to accept as much.”). In a prior statement by Musk, the CEO stated that he had not required approval for any of his tweets prior to the SEC filing its request to find him in contempt of their earlier settlement. The SEC insinuates that it was stunned to learn that Musk took the court order so reluctantly and believed that it was blatant unawareness which led Musk to disrespect the terms of the court-approved agreement.

The billionaire decided that “if they really wanted to prevent fraud, they would circulate every policy they use internally, with the clear denials. They would push for real laws to be passed so that genuine penalties could be put in place.” Instead, Cuban noted, what happens is something that is a lot closer to comedy. Cuban’s defense of Musk was a response to law professor Dan Ravicher, who condemned Musk’s against the SEC on Twitter. Ravicher, who lately stated on Twitter that “Tesla doesn’t sell cars, it sells promises of selling cars,” has a short place on the electric car maker, admitting on March 11 that he is “deep in April $TSLA 280/250 debit put spreads.” The SEC has also said it is “stunning” that Mr. Musk has continued to tweet about Tesla without pre-approval from the company – in spite of the terms of the 2018 settlement, which insist that Tesla administer its CEO’s social media posts. The settlement was reached after the SEC sued Mr. Musk for fraud. It blamed him of disrupting the market by claiming that he was taking his company into private possession. The SEC, at least, seems to think this court filing is definite enough to put the whole situation to bed. “The SEC politely submits that, because there appears to be no doubtful issues of material fact, an evidentiary hearing is unnecessary,” the lawyers write in Monday night’s filing. In other words: We win. Tesla did not instantly respond to comment, but expect its legal team to disagree.

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