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NEW YORK (Reuters) – Elon Musk's lawyers said the US Securities and Exchange Commission had not assumed its hefty burden of demonstrating that the CEO of Tesla Inc. was to be found guilty of contempt of court and that the tweet at the origin of his petition was material. "
FILE PHOTO: SpaceX founder Elon Musk observes the press conference following the launch of the SpaceX Falcon 9 rocket, carrying the Space Crew Dragon spacecraft, unstuck for a non-built test flight to the Space Station International from the Kennedy Space Center in Cape Canaveral. Florida, United States, March 2, 2019. REUTERS / Mike Blake
In a filing in Manhattan federal court on Friday, Musk's lawyers also said their client "is meeting his obligations" to the electric car manufacturer, its shareholders and the court.
Musk is trying not to be found guilty of contempt for violating his fraud settlement with the SEC from October 2018, for tweeting at 7:15 pm. IS on February 19 to its 24 million followers on Twitter that Tesla could build about 500,000 vehicles by 2019.
SEC spokesman Ryan White declined to comment.
Musk's settlement, including civil fines of $ 20 million for him and Tesla, resolved a lawsuit against the SEC regarding a Twitter message posted on Aug. 7, 2018 in which Musk said he had obtained a "financing" to put his private company in Palo Alto, California at $ 420 a share.
The SEC said Musk had committed a "blatant" breach of the settlement by tweeting about Tesla's production prospects without first seeking the approval of the company's lawyers.
In a case filed Monday, the SEC went further, complaining that Musk had never, after the settlement, requested the prior permission of tweets related to Tesla.
However, in the case filed on Friday, Musk's lawyers said that the SEC had acknowledged in negotiations for an agreement that the Tesla-related tweets were not subject to a broad pre-approval requirement. .
They also said the tweet was not material because it simply repeated old news, used generalities, was "ambitious and optimistic" and did not change the course of Tesla's action.
"The key question is whether Musk has complied with Tesla's policy, not whether the SEC is satisfied with Tesla's policy," Musk's lawyers wrote. "Musk's belief that the 7:15 tweet did not require prior approval was correct."
Musk has until March 26 to tell US District Judge Alison Nathan whether he wants a hearing on the evidence relating to the contempt motion. The SEC has stated that no hearing is necessary.
The October settlement forced Musk to step down as president of Tesla. Legal experts have stated that a contempt conviction could result in a higher fine, additional restrictions on his activities, and even his dismissal from the Tesla board of directors or as chief executive officer.
Tesla shares closed Friday down $ 9.49, or 3.5%, to $ 264.53. They are 32% below their peak on August 7th, after the tweet "secured financing".
This is SEC cases c. Musk, US District Court, Southern District of New York, No. 18-08865.
Report by Jonathan Stempel in New York, edited by G Crosse and Diane Craft
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