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Billionaire Elon Musk fought back in February 2019 with the Securities and Exchange Commission outrage filing intended to muzzle Tesla CEO's Twitter comment.
Elon Musk: "The position of the SEC is wrong"
In a fierce response to the New York federal court on March 22, Musk criticized the SEC for its "radical reinterpretation" of a September 2018 consent decree in which it agreed to seek the approval of Tesla administration before publishing anything that could affect the course of TSLA's action.
"The SEC's response makes it clear that its efforts to condemn Musk's contempt rely on a radical reinterpretation of the order that would impose radical restrictions that Musk never agreed to."
"The SEC's position is wrong at virtually every level."
Musk: My Tweet has not moved Tesla Stock
In his latest brief, Musk said that he had not violated the consent order by sending an early tweet in February about the Tesla production estimate for 2019.
Musk pointed out that the data he had tweeted was already public information. In addition, he clarified his tweet a few hours later to make sure that there was no confusion.
Here is the tweet that enraged the SEC:
That is an 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 approximately $ 400,000.
– Elon Musk (@elonmusk) February 20, 2019
Elon Musk: SEC goes too far
In particular, Musk insisted that his tweet did not meet the SEC's pre-approval requirements because it was posted at the close of the stock market and had no impact on the price. Tesla shares.
As a result, Musk's lawyers claimed that the SEC was trying to muzzle the billionaire's tycoon.
"Musk's belief that the 7:15 tweet did not require prior approval was correct."
"Every feature of immateriality is present: the tweet took back previously disclosed information, using broad terms, was ambitious and upbeat and did not provoke any reaction after the markets closed."
"The Policy does not require anywhere that all communications on the topics listed be subject to prior approval – regardless of their meaning or context."
This disturbing Twitter image of Elon Musk with the eyes of Elizabeth Holmes sums up perfectly this stalemate of the SEC.
Elon Musk but with the eyes of Elizabeth Holmes pic.twitter.com/wpaJFTW6Zm
– Rob Beschizza (@Beschizza) March 22, 2019
"Serious Constitutional Concerns"
As CEO, Musk said he understood he had to be cautious about what he was posting on social media. However, he insists that "the overly broad interpretation" of the SEC would raise "serious constitutional problems", such as the restriction of his rights to freedom of expression.
In addition, Musk notes that its use of Twitter is an important part of Tesla's consumer marketing and awareness efforts.
"The SEC's interpretation of the Order would not only gag a" false or misleading "speech; that would gag in any speech related to Tesla.
"Musk's ability to communicate with customers about Tesla products is critical to Tesla's success."
Musk: SEC filed petition for contempt as revenge
As the NCC report reported, Musk was subjected to numerous shots for his tweets. Two weeks ago, an Ohio shareholder filed a lawsuit against Musk and the entire Tesla board of directors, claiming that his tweets had hurt the automaker.
Musk did not respond to the shareholders' complaint, but said that the Securities and Exchange Commission filed its motion for contempt of court for petty revenge because it had criticized them.
In an interview with 60 Minutes in December 2018, Musk joked, "I do not respect the SEC." (Video below).
The case is the US Securities and Exchange Commission c. Elon Musk, 18-cv-08865, US District Court, Southern District of New York.
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