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Elon Musk filed a new set of arguments during his one-month battle with the Securities and Exchange Commission February 19 tweet about the production goals of Tesla.
As part of an agreement reached in September, Musk promised to obtain from Tesla's lawyers the approval of tweets that "contain or could contain" important information – legal jargon for important information for people who trade Tesla shares. The SEC claims that Musk's February tweet, claiming that Tesla would produce "about 500,000 vehicles" in 2019, was against that obligation.
Musk is not in agreement. He claims that he was only repeating Tesla's earlier production estimates. And he insists that he had the right to use his own judgment to determine that the information was not important – and that, therefore, Tesla's lawyers did not not to give their prior authorization.
Tesla is "best placed to interpret his own policy"
Musk reiterated these claims in his latest filing. The settlement required Musk to follow a set of guidelines developed by Tesla, and Musk notes that Tesla's lawyers said he did not violate these guidelines.
"Tesla – who is best placed to interpret his own policy – told the SEC that Musk had complied with the policy," Musk's lawyers wrote in a statement on Friday. "There is significant evidence that Musk has fulfilled his obligations and the court can enforce his order on grounds only for these reasons."
It should be noted here that Tesla's General Counsel, Dane Butswinkas, abruptly resigned on February 20, 2019, one day after Musk's tweet on February 19 and the same day, the SEC sent Tesla a letter asking more information about the tweet. Butswinkas had been at work only for about two months. According to Tesla's policy, Butswinkas was one of the lawyers who was supposed to review important tweets sent by Musk before they were published, but Musk never submitted tweets to his approval.
On March 11, an outside lawyer at Tesla's WilmerHale law firm sent a letter to the SEC in which he stated that, according to Tesla, Musk's tweets were not important and that Musk's was not important. was therefore consistent with Tesla's Tweets approval policy.
"Musk did not tweet material information"
In its latest case, the SEC blamed Musk for failing to approve one of his tweets since the policy came into effect in December. Among these tweets are tweets about "vehicle tax credits and their pricing", "plans for expansion of international charging stations", "plans for construction and production of a new Shanghai factory ", and the future." The SEC considers all these topics as important to Tesla shareholders.
Again, Musk is not in agreement.
"The SEC has shown, through its selection of ten tweets, that no matter their innocence, notoriety or distance from the topics mentioned in the Policy, because the tweet is about Tesla, the SEC believes that Musk must pre-approve them," Musk writes. "These tweets, which include statements refuting false rumors and repeating well-known security information, prove Musk's point of view." Since the order was entered, Musk has not tweeted anything about it. 39, important information about Tesla "
Musk argues that the broader interpretation of the SEC is "inconsistent with the plain language" of the settlement agreement reached between Musk and the SEC. It includes drafts of red lines that Musk's lawyers sent to the SEC during settlement negotiations. According to Musk, the SEC first sought approval for all Tesla-related tweets, but Musk insisted that only important tweets – or likely to be – should be subject to approval. prior. In Musk's view, the SEC is trying to rewrite the agreement and force it to ensure that all Tesla-related tweets are pre-approved.
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