Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy.</s>The Securities and Exchange Commission asked a New York judge on Monday to decide whether Tesla, Inc.’s Chief Executive Officer Elon Musk violated the terms of a settlement agreement that the two parties reached last year.

Last month, the SEC asked a federal judge to hold Musk in contempt of court, arguing one of his tweets from Feb. 19 violated language in the settlement.

Musk tweeted at the time that Tesla “will make around 500k” cars in 2019, which the SEC argued violated an agreement requiring Tesla to vet all of Musk’s public communications about the company. Musk amended the tweet within several hours.

On Friday, Musk defended his Twitter use to New York Judge Alison Nathan, arguing in court papers that the SEC’s contempt request relies on a “radical reinterpretation” of the settlement.

Musk’s lawyers included email communications and drafts of the original settlement, which show the SEC wanted all of Musk’s public communications about Tesla, including tweets, to be approved by the company before publishing. Musk allegedly turned down that version of the settlement.

The SEC claimed last week that Musk has not had a single tweet about Tesla pre-approved by a lawyer “in the months since the court-ordered pre-approval policy went into effect.”

According to Musk’s lawyers, when the two parties were originally reaching an agreement, they argued to the SEC that “Musk’s ability to engage with customers about Tesla products is critical to Tesla’s success, and that Musk would not agree to broad pre-approval of Tesla-related statements.”

In Monday’s communications to Nathan, the SEC argued that Musk’s defense relies on “selective omission of certain settlement communications,” Bloomberg reports. The agency offered to provide more information about the terms of the settlement if needed.

Legal experts who spoke with CNN said Musk could face consequences including a fine, further limits on his communications and his social media use, and his removal as Tesla’s CEO.

On the other hand, they said Nathan could toss out the settlement, which would reopen Musk to legal action on behalf of the agency.</s>The Securities and Exchange Commission told a New York judge that she should be able to decide whether Tesla Inc. CEO Elon Musk violated the terms of his settlement with the regulator and whether to punish him for that without holding a hearing "because there are no material issues of disputed fact.

The SEC wrote to Judge Alison Nathan on Monday to say there is no ambiguity to the terms of the settlement and that Musk tried to muddle the matter with "selective omission of certain settlement communications" in his filing Friday defending his actions.

The SEC offered to provide more written information on the settlement negotiations if Nathan decides she needs additional information. The October agreement ended an investigation into Musk's statements on Twitter about taking the company private, and required him to obtain preapproval of communications that are material to Tesla. He tweeted a Tesla production forecast for this year in February and corrected himself within a few hours, prompting the SEC to ask that he be held in contempt.</s>A Federal judge in New York has ordered to hear oral arguments from both the United States Securities and Exchange Commission and lawyers representing Tesla CEO Elon Musk in court next week over the duo's most recent Twitter-related spat. Both Musk and the SEC have requested that the judge forego a hearing, as neither party disputed the material facts of the case and rather argued over their interpretations of the settlement's terms. Instead, Judge Alison Nathan will hear arguments from both sides before ruling on the SEC's request to hold Musk in contempt of a prior no-guilt settlement.

The SEC maintains that because Musk admittedly did not seek prior approval to any tweets prior to the contempt filing, rebuking his actions and stating that he did not comply with the terms of the settlement. Specifically, the most recent lawsuit brought on by the SEC surrounds a set of tweets made on Feb. 19 regarding Tesla's claimed production numbers which were made several hours apart. The SEC argued that the original tweet contained material information, whereas Musk believes that the information was previously disclosed and was not subject to pre-review.

In total, 11 tweets were submitted into evidence as being in violation of the settlement. Musk's lawyers disagree, stating that none of the CEO's tweets could have "reasonably contained material information" and be subject to the pre-approval clause in the settlement. "The only tweets that would have to be, say, reviewed, would be if a tweet had a probability of causing a movement in the stock," Musk explained during an interview with 60 Minutes' Lesley Stahl. "Otherwise it's 'Hello, First Amendment.' Freedom of speech is fundamental."

Musk has outright admitted to his disdain toward the SEC, publicly taunting the agency by calling it the "Shortseller Enrichment Commission" and stating that he does not respect it. Meanwhile, the regulatory body continues to suggest that Musk's judgment "borders on the ridiculous" and asks that he be held in contempt of his earlier settlement for not following the terms regarding disseminating potentially misleading information. If Judge Nathan finds Musk in contempt, it's not clear what her ruling will entail. It's possible that she has requested to hear the arguments from both sides to gather a better understanding of the problem, or potentially attempt to reach an understanding of reasonable remediation. Rulings could find that Musk's tweets did not violate the settlement and dismiss the lawsuit, or deem that Musk did, in fact, not follow the pre-review clause and issue a fine. Should she rule harshly, Musk could even be barred from acting as an officer of a publicly traded company.</s>A federal judge on Tuesday scheduled an April 4 hearing to hear oral arguments in the U.S. Securities and Exchange Commission lawsuit seeking to hold Tesla Inc Chief Executive Elon Musk in contempt.

NEW YORK: Lawyers for Elon Musk and the U.S. Securities and Exchange Commission will square off in a Manhattan courtroom next week over whether the Tesla Inc chief executive should be held in contempt over one of his tweets.

U.S. District Judge Alison Nathan scheduled oral argument on an SEC contempt motion for April 4 at 2 p.m. EDT (1800 GMT), after both sides said they saw no need for an evidentiary hearing.

Musk was accused by the SEC of violating his October 2018 fraud settlement with the regulator by tweeting on Feb. 19 to his more than 24 million Twitter followers that Tesla could build around 500,000 vehicles in 2019.

The SEC said that tweet was improper because Musk did not get advance approval from Tesla.

Musk's lawyers have said the tweet was not material, and merely restated a target for his Palo Alto, California-based electric car company that he had discussed publicly in January.

John Hueston, a lawyer for Musk, did not immediately respond to requests for comment. The SEC did not immediately respond to a similar request.

The settlement was intended to resolve a lawsuit over a Twitter post last Aug. 7 in which Musk said he had "funding secured" to take Tesla private at US$420 a share.

It called for Musk and Tesla to each pay US$20 million civil fines, and for Musk to step down as Tesla's chairman.

Legal experts have said a contempt finding could subject Musk to a higher fine, further restrictions, or even removal from Tesla's board or as chief executive. Tesla shares closed Tuesday up US$7.35, or 2.8 percent, at US$267.77 on the Nasdaq.

The case is SEC v Musk, U.S. District Court, Southern District of New York, No. 18-08865.</s>The ongoing back-and-forth between Elon Musk and the Securities and Exchange Commission is headed to a new stage: A federal judge has set a date for hearing the SEC’s contempt suit against the Tesla CEO.

U.S. District Judge Alison Nathan said she will hear the case April 4 in Manhattan. The SEC is charging Musk with violating the terms of a settlement in which he agreed to receive approval before tweeting or making other statements about Tesla’s business on social media outlets.

At issue are some tweets Musk sent out Feb. 19 about expectations for Tesla’s car production levels this year.

“Tesla made 0 cars in 2011, but will make around 500k in 2019,” Musk tweeted. Later that day, Musk revised his estimate and tweeted that Tesla’s “Deliveries for (the) year still estimated to be about 400k.”

Based on those tweets, the SEC sued Musk for contempt, arguing that he broke the terms of this past fall’s agreement. In its suit, the SEC said that Musk “once again published inaccurate and material information about Tesla to his over 24 million Twitter followers.”

Musk and the SEC have been going at each other to various degrees since September, when the SEC brought fraud charges against Musk and sought to remove him from running any public company in the United States. The SEC charges at that time stemmed from Musk’s plan to take Tesla private for $420 a share, and how he had tweeted that he had “funding secured” for the idea, yet failed to provide in-depth financing details about the proposal.
• Elon Musk tells judge he shouldn’t be held in contempt for tweets
• Former Tesla employee hints at insider trading with SEC whistleblower tip
• Look, just quit tweeting, OK? Investors sue Tesla and Elon Musk again Musk eventually withdrew his plan to take Tesla private. Just days after the SEC brought charges against Musk, the two reached a settlement that allowed Musk to remain as Tesla’s CEO, but required him to step down as the company’s chairman for at least three years. Musk and Tesla also agreed to pay a fine of $20 million each, in addition to Musk agreeing to get pre-approval for his tweets and other statements about the company.

While Nathan will hear the case next week, she is not under any obligation to make a ruling at that time. Musk could face anything from being removed from his CEO position, to a fine and more severe restrictions on his use of social media. It’s also possible that Nathan could void the settlement between Musk and the SEC, which could potentially open up Musk to further securities charges.</s>
• Tesla CEO Elon Musk has run into trouble with the Securities and Exchange Commission (SEC) twice in the past year after he tweeted in August that he had lined up a deal to take Tesla private.
• Musk settled with the agency in September after it alleged that he was not as close to acquiring funding for the deal as he indicated.
• In February, Musk tweeted a projection about vehicle production that the SEC says violated the terms of their settlement. The agency asked a judge to hold Musk in contempt of the court that approved the settlement.
• Attorneys for Elon Musk and the SEC will make their case before a judge in New York City on April 4.

Tesla CEO Elon Musk has run into trouble with the Securities and Exchange Commission (SEC) twice in the past year after he tweeted in August that he had lined up a deal to take Tesla private.

The SEC sued Musk over that tweet, arguing that Musk was not as close to acquiring funding for the deal as he indicated. Musk reached a settlement with the agency that required him to step down as the chairman of Tesla’s board of directors for three years, pay a $20 million fine, and receive approval for all future written communications that could be relevant to Tesla shareholders.

Read more: Tesla is having another chaotic year – these are the biggest challenges Tesla has faced so far in 2019

But Musk was not chastened by the settlement. In the following months, he lashed out at the SEC, saying he did not respect it. And in February, he tweeted a projection about vehicle production that the SEC says violated the terms of their settlement. The agency asked a judge to hold Musk in contempt of the court that approved the settlement.

Musk and the SEC have spent the past few weeks debating whether or not Musk’s February tweet followed the terms of their settlement.

Here’s what you need to know about Musk and the SEC’s fraught relationship.

Got a Tesla tip? Contact this reporter at mmatousek@businessinsider.com.

August 7, 2018: Musk says he has “funding secured” to take Tesla private

Musk tweeted on August 7 that he had obtained the funding necessary to take Tesla private at $420 per share.

“Am considering taking Tesla private at $420. Funding secured,” Musk tweeted before issuing a formal statement on Tesla’s website.

Musk said in the statement that a shareholder vote would have to be held before a final decision could be made. But he tweeted that investor support was confirmed.

Taking the company private was “the best path forward,” Musk said in the statement. He said the pressures of being a public company created distractions and promoted short-term thinking that might not produce the best decisions in the long term.

Musk’s statements raised questions about the certainty of funding he referenced and where it would come from.

The SEC filed a lawsuit against Musk in September, alleging that Musk made “false and misleading statements” in August about the possibility of taking Tesla private. The agency said in the lawsuit that it sought to bar Musk from being an officer or director of a public company.

In the lawsuit, the SEC claimed Musk said a representative from Saudi Arabia’s Public Investment Fund had shown interest in taking Tesla private, but that Musk had never discussed any of the specific terms he described on Twitter with the Saudi fund or any other potential backers before making them public. Those terms included the proposed $420 share price and an option for all existing Tesla shareholders to remain with the company after it went private.

Musk said he was “deeply saddened and disappointed” by the lawsuit, which he called “unjustified,” in a statement to Business Insider.

The SEC reached a settlement with Musk at the end of September. Under the terms of the settlement, Musk didn’t admit or deny the allegations in the agency’s lawsuit against him, but had to step down as the chairman of Tesla’s board of directors for three years, pay a $20 million fine, and receive approval for all future written communications that could be relevant to Tesla shareholders. Tesla also received a $20 million fine, despite not receiving fraud charges.

October 4 and December 9, 2018: Musk takes aim at the SEC

Musk seemed to take aim at the SEC in an October tweet, calling it the “Shortseller Enrichment Commission.”

“Just want to that the Shortseller Enrichment Commission is doing incredible work,” he said. “And the name change is so on point!”

And during an interview with “60 Minutes” that aired in December, Musk said he did not respect the SEC.

“I want to be clear: I do not respect the SEC, I do not respect them,” Musk said when asked about the SEC’s lawsuit against him.

Musk tweeted on February 19 that Tesla would make around 500,000 cars in 2019, after Tesla said in its fourth-quarter earnings letter that it expected to deliver between 360,000 and 400,000 vehicles in 2019. (Musk said during a conference call following the earnings letter that Tesla could deliver up to 500,000 Model 3s in 2019.)

Four hours later, Musk corrected the projection in a new tweet, saying Tesla would by the end of 2019 reach a rate of production that would result in around 500,000 cars if maintained for a full year.

February 25: The SEC accuses Musk of violating their settlement

The SEC said in a court filing that Musk had violated the terms of his settlement with the agency by not receiving approval from Tesla before publishing his tweet about vehicle production. The agency asked a judge to hold Musk in contempt of the federal court that approved the settlement.

March 11: Musk’s attorneys argue that the SEC is overreaching

Musk’s attorneys said in a March 11 response that Musk did not violate the settlement and argued that the SEC was overstepping the bounds of their agreement.

Musk’s settlement with the SEC requires Musk to receive approval from Tesla before tweeting information about the company that could be relevant to shareholders. The February 19 tweet about vehicle production did not meet that criterion, Musk’s attorneys said, since it was close to projections that had already been made.

According to Musk’s attorneys, the SEC was attempting to expand the settlement’s scope to include any of Musk’s tweets about Tesla, regardless of their relevance to shareholders.

“Such a broad prior restraint would violate the First Amendment,” Musk’s attorneys said.

In its response to Musk’s attorneys, the SEC argued that the tweet in question was “a blatant violation” of their settlement because it was relevant to shareholders and because Musk did not get approval from the lawyer at Tesla who was assigned to review his tweets.

That the lawyer set up a meeting with Musk to write the corrected tweet indicates that the first tweet did, in fact, violate the settlement, the SEC said.

“Musk’s contention – that the potential size of a car company’s production for the year could not reasonably be material – borders on the ridiculous,” the agency said. “Musk’s shifting justifications [for tweeting the projection without approval] suggest that there was never any good faith effort to comply with the Court’s order and the Tesla Policy. Rather, Musk has simply elected to ignore them.”

In a March 22 response to the SEC, Musk’s attorneys said their settlement requires Musk to follow a policy created by Tesla to determine if he needs approval before tweeting about the company. According to Musk’s attorneys, Tesla told the SEC that Musk had followed its communication policy.

Musk’s attorneys also cited Tesla’s first-quarter earnings call, during which Musk said Model 3 deliveries could reach around 500,000 this year, which, when combined with the company’s rate of production for its Model S sedan and Model X SUV, would align Musk’s February 19 projection with prior estimates.

Attorneys for Elon Musk and the SEC will make their case before a judge in New York City on April 4.</s>A federal judge on Tuesday scheduled an April 4 hearing to hear oral arguments in the U.S. Securities and Exchange Commission lawsuit seeking to hold Tesla Inc Chief Executive Elon Musk in contempt.

NEW YORK: A federal judge on Tuesday scheduled an April 4 hearing to hear oral arguments in the U.S. Securities and Exchange Commission lawsuit seeking to hold Tesla Inc Chief Executive Elon Musk in contempt.

U.S. District Judge Alison Nathan in Manhattan scheduled the hearing for 2 p.m. EDT, in a brief order that did not say what will be discussed. The SEC and Musk previously said they saw no need for an evidentiary hearing.</s>NEW YORK, March 26 (Reuters) - A federal judge on Tuesday scheduled an April 4 hearing to hear oral arguments in the U.S. Securities and Exchange Commission lawsuit seeking to hold Tesla Inc Chief Executive Elon Musk in contempt.

U.S. District Judge Alison Nathan in Manhattan scheduled the hearing for 2 p.m. EDT, in a brief order that did not say what will be discussed. The SEC and Musk previously said they saw no need for an evidentiary hearing.</s>A federal judge in New York will hear oral arguments next week in a lawsuit brought by the US Securities and Exchange Commission that seeks to hold Tesla CEO Elon Musk in contempt for violating a settlement deal.

Judge Alison Nathan on Tuesday set a hearing for April 4. It is unclear when she will issue a ruling.

Nathan is tasked with weighing the SEC’s request that Musk be held in contempt for violating a settlement agreement reached last year, which required he get pre-approval for social media posts about the electric car company.

Musk tweeted on February 19 that “Tesla made 0 cars in 2011, but will make around 500k in 2019.” Hours later, he posted a follow-up tweet indicating that the company will actually deliver just 400,000 cars this year.

Although Musk corrected his mistake, regulators said he had “once again published inaccurate and material information about Tesla to his over 24 million Twitter followers,” according to court papers.

The SEC sued Musk last month, arguing that he had breached a deal struck last October that mandates he receive pre-approval of any posts with information that’s “material” to shareholders. Tesla agreed to establish a board committee to oversee those posts.

In a court filing, Tesla conceded Musk did not receive pre-approval from anyone on that committee for his February posts, but the company has since claimed that he didn’t need it.

Musk maintains he has diligently tried to follow the court settlement, and that the SEC’s request is a breach of his constitutional right to free speech.

The battle between Musk and the SEC goes back to August 2018, when Musk tweeted that he had secured funding to take Tesla private at $420 a share. Tesla’s stock soared after his announcement.

However, Musk hadn’t secured the funding, according to the SEC, and in September the regulator filed a lawsuit saying he misled investors. Tesla and Musk were each fined $20 million as part of the settlement and Musk was forced to step down as Tesla’s chairman. He’s remained Tesla’s CEO.

If Musk is found guilty of contempt, legal experts say he could face a fine, further limits to his social media use and his removal as Tesla CEO. Nathan could also toss out the settlement with the SEC, effectively reopening the agency’s litigation against Musk and Tesla.
The U.S. Securities and Exchange Commission tells a judge in New York that she has the power to decide whether the CEO of Tesla, Elon Musk, violated the terms of his settlement with the SEC without holding a hearing, because there are no open issues of material fact.