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Tesla's CEO, Elon Musk, really wants to keep tweeting without any other adult watching over his shoulder, despite an agreement with the Securities and Exchange Commission ordering him not to send tweets that could affect Tesla shares without obtaining the prior approval of the company. officials.
The issue is a tweet of February 19 in which Musk tweeted, then corrected, inaccurate figures on the production rates of Tesla vehicles without having previously examined. The SEC recently asked Musk to despise this post, which she said violated a settlement in 2018 after falsely claiming it had "secured financing" for Tesla to be privatized at a price of "420". The agreement provided for Musk to step down from the presidency of Tesla's board of directors, pay fines of tens of millions and validate beforehand the potentially "important" messages on the company with staff. According to the SEC, Musk has never done this last thing.
The SEC recently released a court case claiming that Musk continued to tweet inaccurate information about the company in defiance of the settlement, calling its reading of the agreement a "tortured analysis" that "borders on ridicule." The legal team of Musk responded Friday, according to the Rod, and in legal documents has exposed his case.
Musk's lawyers, who tried to present the SEC as an uncontrollable body, said in the documents that the wording of the transaction allowed him to freely determine whether a tweet was important or not before sending it. outside. They also claimed that the settlement only requires Musk to comply with Tesla's policy, which, according to Tesla:
The key question is whether Musk complied with Tesla's policy, and not whether the SEC is satisfied with Tesla's policy. Tesla's policy does not tweet itself related to Tesla. Instead, it incorporates the established legal definition of "materiality," which is context-specific and fact-based, and lists topics that "may" be important "based on [their] importance. The policy necessarily imposes on the executive the duty to determine, in good faith, whether a particular tweet should be pre-approved under the provisions of the policy.
"Moreover, Musk is convinced that the [production numbers] prior approval was correct, "Musk's lawyers added. "Every feature of immateriality is present: the tweet has reformulated the previously disclosed information, used general terms, was ambitious and upbeat and did not provoke any reaction after hours of trading. The SEC says it's a "post-hoc" streamlining. "
They also pointed to other tweets that, according to the SEC, should have been treated with a company lawyer, saying that they were not significant: "It's because 39; he complied with the order and did not challenge it, that these tweets did not require prior approval. . "
That does not make much progress, as this argument is the one that the SEC mocked earlier this week.
Musk not only "demonstrated his inability to discern any potential materiality" in his communications, the agency wrote, but the order requires him to seek prior permission before tweeting anything that "could reasonably be" interpreted as being important. The agency also described Musk's arguments that the whole mess is somehow a matter of meaningless freedom of expression, noting that his signature of the regulation gave up these rights and that the power to apply the The agreement belongs to the court, and not to a crazy SEC. He also wrote that there was no problem of freedom of expression to be resolved regardless of the fact that it only required the removal of all relevant posts from his legal department before tweeting them.
The SEC also referred to Musk's argument that he would have the power to declare himself in compliance with the regulation without any control from Tesla:
The Court's order clearly states that Musk must obtain prior approval of written submissions containing or reasonably capable of containing material information, and nowhere specifies that this requirement is subject to its discretion. Musk has voluntarily given up on constitutional arguments that he is now advancing.
Finally, as noted by The Wall Street Journal, the SEC asked if Musk was really in compliance with Tesla's policy, writing that "many of these tweets concerned topics specifically identified by Tesla in his policies as potentially important for shareholders ".
As Le Verge says, it is more interesting to note that Musk's Friday deposits include documents from an earlier version of the settlement he never signed. This agreement allegedly submitted all of Musk's public statements about Tesla, whether material or not, to prior authorization by the company's personnel. The Musk legal team wrote in the documents that it was a "point of disagreement during the negotiations", which led Musk to sign the current agreement with stricter terms, but with more vague about what he was allowed to say.
This certainly seems to require a lot of effort to be able to continue to publish Tesla statements on Twitter, but Musk is apparently very determined to continue posting. According to Judge Verge, the judge in charge of the case stated that both parties had until March 26 to request a hearing on whether Musk should be found guilty of contempt of court ; the SEC did not, apparently convinced that the court will agree that Musk's lawyers spit gibberish.
[The Verge]
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