Elon Musk's Tweets Keep Landing Him in Trouble With the SEC
(Bloomberg) -- Elon Musk has kept Tesla Inc. investors on their toes for more than six months with his tweeting and scuffles with U.S. financial regulators. He is showing no signs of slowing down.
The U.S. Securities and Exchange Commission asked a judge Monday to hold Musk in contempt for violating last year’s settlement with the agency, raising a fresh round of regulatory issues for the electric-car maker’s chief executive officer. The latest controversy involves a tweet Musk posted Feb. 19, yet the spat has been going on since early August.
Here’s a timeline:
Musk tweets that he’s considering taking Tesla private, with funding secured, prompting the SEC to begin making inquiries into the truthfulness of his posting. Prior to that, the regulator had already been gathering information about Musk’s manufacturing goals and sales targets.
Reports say Tesla received a subpoena from the SEC over Musk’s Aug. 7 tweet, showing intensifying regulatory scrutiny for his communications.
The SEC sues Musk over that tweet, saying he misled investors by claiming falsely he had lined up funding for the take-private transaction. The SEC seeks unspecified monetary penalties and requests that a judge bar Musk from serving as an officer or director of a public company.
Musk reaches a settlement with the SEC, agreeing to give up his role as Tesla chairman and pay a $20 million fine. The settlement requires that Tesla appoint two new independent directors and implement controls to oversee the communications of Musk, who can stay on as CEO.
Musk goes on an hourslong tweet storm, calling the SEC the “Shortseller Enrichment Commission” and sarcastically quipping that it was “doing incredible work.” He also continues a tirade against short sellers, calling for their activities to be outlawed.
Despite the Oct. 4 tweets, Tesla and SEC agree to reaffirm the settlement, saying that an agreement is in the best interest of investors. The judge signs off on it five days later.
Musk tweets that the $20 million penalty he was given for announcing that he had funding to take Tesla private was “worth it.” Musk also said he was signing off Twitter for a few days.
Musk keeps testing the limits that the SEC put on his tweeting, saying he deleted all references to the titles he held at Tesla, then joked that in doing so, he may have confused “the authorities.”
In an interview with CBS’s “60 Minutes,” Musk says he has no respect for the SEC and that none of his tweets have been censored since he reached the settlement with the agency.
Musk corrected a prediction for how many cars Tesla would make in 2019, just hours after tweeting that production would reach about 500,000 vehicles this year.
The SEC asks a judge to hold Musk in contempt, claiming that his Feb. 19 tweet violated the settlement when he wrote that “Tesla made 0 cars in 2011, but will make around 500k in 2019.” Musk responds by sending another taunting tweet.
This is how the market reacted to what the SEC said.
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