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Elon Musk says that he should not be found guilty of contempt of court for a recent tweet about Tesla because he has not violated the settlement agreement, and "he's not". There is no reason to impose sanctions for contempt ", according to a new file. The filing states that Musk "correctly used his discretion to determine" that a tweet of February 19 "contained no information that could reasonably be considered important" for Tesla.
The tweets in question are best understood as "a proud and optimistic reformulation of publicly disclosed information," the document says. The filing also notes that Musk's tweets on Tesla's annual production are after the close of the market. In addition, Musk tried to respect the rules by tweeting less, showing that he took it seriously. Musk's lawyers also argue that the SEC's interpretation of the settlement agreement "raises serious questions about the first amendment."
Musk responds to a complaint filed by the Securities and Exchange Commission (SEC) on February 25, when the agency asked a federal judge to convict the CEO of Tesla in contempt. The SEC said that a message sent by Musk on Feb. 19 about the company's production targets for 2019 had violated the settlement reached between Musk and the SEC last year. It's not quite clear what the result will be if Musk is held in contempt.
The SEC said in February that Musk had included in this tweet inaccurate information about the number of cars that the company intends to manufacture in 2019. Musk wrote that Tesla "will make about 500k [cars] in 2019, "even though Tesla planned to make a maximum of 400,000 cars this year just weeks before. Musk followed a few hours later with another tweet where he corrected himself, adding that he meant that Tesla will make cars fast enough to produce 500,000 in one year. While the SEC was investigating Musk's complaint, the agency discovered that Musk had not handled the tweet by a company attorney before sending it, a violation of the terms of the settlement. Last year.
Musk's lawyers said that the tweet of correction was not necessary, because the original tweet of February 19 did not violate its regulation. Tesla's lawyer reviewed the tweet after it was published. "This was in accordance with the Policy, which provides that Tesla will periodically review tweets after their publication and provide comments if necessary," wrote Musk's attorney. Although Tesla and Musk did not consider the tweet as an important element, he followed the tweet a few hours later "by caution". The lawyers wrote that the tweet did not cause any fluctuation in the share price.
The settlement came when the SEC sued Musk last September for committing securities fraud, after the CEO announced in August that he had obtained "funding" to make Tesla private. Musk had held only a few exploratory meetings with the Saudi Public Investment Fund and had no funding in place when he sent this tweet, which temporarily rocketed the stock price. from Tesla.
The SEC opened an investigation the next day and sent an agreement to Musk at the end of September, which the CEO of Tesla would have refused. The agency instituted proceedings against him in the southern district of New York on 27 September. Two days later, Musk accepted a settlement with more onerous terms. He was forced to resign as chairman of Tesla's board of directors for three years, agreeing to submit any public statements (including tweets) containing important information about the company to a lawyer. and fined him $ 20 million. Tesla was also fined $ 20 million and had to appoint two new independent directors to its board.
Musk spent the following months teasing the SEC by calling it the "Short Sale Enrichment Commission" 60 minutes interview that he always planned to tweet what he wanted. He added that while he respected the judicial system, he did not respect the SEC.
The SEC said in its request to hold the president of Tesla guilty of contempt that this type of behavior showed that Musk "did not intend to diligently seek to comply with the [terms of the settlement]. "As it happens, the SEC is watching 60 minutesand this interview was cited in the agency's ranking.
"Although Musk claims to" respect the justice system, "his deliberate indifference to complying with the court's final ruling shows the opposite," SEC counsel said in February.
In contrast, Musk's lawyers characterize the SEC's settlement interpretation as "unconstitutional takeover". Ask lawyers to re-read their tweets before sending them – the SEC's interpretation of the regulation "would effectively prevent Musk from speaking all issues related to Tesla's activities based solely on the subject ", indicates the document filed today." Musk has never consented and would not consent to such a gag order. "
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