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Elon Musk will not go quietly. On Monday evening, lawyers representing the Tesla CEO submitted a case to a federal judge in New York, claiming that she had to reject the Securities and Exchange Commission 's request to convict Musk in defiance of the court for another message -. Musk's legal team argued that the SEC overestimated its claim and asserted that the agency was attempting to violate the right to freedom of expression of its first amendment.
If the judge, Alison Nathan, of the Southern District Court of New York, founds Musk guilty of contempt of court, she would decide the sentence. "If the SEC takes it, it is highly likely that the district court will fined Mr. Musk and leave him on a short leash, strongly warning that further violations could result in M's ban." Musk for a while. Peter Haveles, a lawyer with Pepper Hamilton, told WIRED last month.
This last chapter of the legal quarrel between Musk and the SEC goes back to the evening of February 19th, at 7:15 pm Eastern Time to be exact, when Musk wrote on Twitter: "Tesla made 0 cars in 2011, but will make about 500,000 in 2019. "About four and a half hours later – at 11:41 pm ET – Musk's corrected himself, tweeting", which means "annualized production rate at the end of 2019 probably around 500 000, or 10 000 cars / week .. Deliveries for the year are still estimated at about $ 400 000.
Musk being at the head of a publicly traded company, it is already far from ideal to commit a mistake on his company on Twitter – which investors consider a valid source of information. But Musk and Tesla also reached an agreement with the SEC in September on another tweet containing incorrect information about the builder's operations. It was after Musk tweeted that he was planning to privatize Tesla and that he had obtained the "funding obtained". He quickly revealed that he did not have this funding, and Tesla announced that it would remain public.
In the subsequent contract with the SEC, Musk left his position as chairman of Tesla's board for at least three years. Tesla and he each paid a $ 20 million fine. Musk and Tesla agreed that the CEO's tweets about the automaker would be truthful and reviewed by a team of Tesla lawyers before they were sent. According to the record, Tesla's General Counsel and a designated "Disclosure Council" are responsible for approving Musk's tweets on Tesla. The lawyers wrote that "the disclosure board and other members of Tesla's legal department have reviewed the controls and procedures updated with Musk on several occasions".
In December, Musk told CBS 60 minutes that it does not respect the SEC and that the only tweets that require prior approval are those that may affect Tesla's stock price. When asked how Tesla could know what tweets would do this, Musk replied, "Well, I guess we could make mistakes. Who knows? The SEC cited this interview in its motion for contempt of court, stating that "Musk has not made a diligent and good faith effort to comply" with the terms of its settlement.
But now, Musk and the SEC are discussing what this "pre-approval" actually means. Tesla's attorneys claim that no one has pre-approved the tweet in question, but that this should not matter because the information regarding these production figures has already been made public: in a call results, in year – end financial results and in a report. Filing with the SEC on the day Musk sent the tweets in question. Musk had not received prior approval before sending this tweet because "it was simply his abbreviated name and was entirely consistent with previous public disclosures detailing Tesla's anticipated production volume," according to the record .
In addition, the Musk team argues that the SEC's attempt to limit Musk's tweet violates his first amendment's right to freedom of expression.
The Musk legal team also claims that the CEO has really worked very hard since the SEC's settlement to pay attention to his tweet behavior. He wrote that Musk tweeted less about Tesla "is a reflection of his commitment to respecting the Order and avoiding unnecessary disputes with the SEC". , "Is precisely the kind of diligence that one would expect from someone who strives to comply with the order."
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