The Securities and Exchange Commission (SEC) has asked a judge to hold Tesla billionaire Elon Musk in contempt over a fresh tweet the regulator believes could have misled investors.
Musk told his followers on 19 February that “Tesla made 0 cars in 2011, but will make around 500k in 2019”.
A few hours after that tweet, the entrepreneur followed up to confirm that the 500,000 figure would be Tesla’s annualised production rate at the end of 2019.
“Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k,” he tweeted.
Tesla made 0 cars in 2011, but will make around 500k in 2019— Elon Musk (@elonmusk) February 20, 2019
But the SEC has claimed the original tweet breaches a settlement it reached with Musk and the regulator last year.
Court papers filed on Monday said Musk “once again published inaccurate and material information about Tesla to his over 24 million Twitter followers”.
Musk’s latest tussle with the regulator sent Tesla’s stock down four per cent in after-hours trading.
Under the terms of the SEC’s October settlement with Musk over a separate tweet, the regulator said Musk needed board approval for tweets containing information deemed “material” to shareholders
It noted that the latest tweet did not appear to have this authorisation.
Musk replied by stating that Tesla had divulged the figures in its January earnings call, in a discussion around Tesla’s Model 3 car.
SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing … ?— Elon Musk (@elonmusk) February 26, 2019
“SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing …,” he tweeted.
However, edits to any pre-approved language would need fresh approval by Tesla, the SEC’s settlement states.
Tesla responded by saying that its designated securities lawyer met with Musk after seeing the initial 19 February tweet, and they together drafted the follow-up correction.
The SEC reached a settlement with Musk over a tweet in which he claimed funding was available to take Tesla private for $420 per share.
Musk and Tesla paid the regulator $20m each to settle the case.
Musk was also banned from holding the position of chair for three years.