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On Monday, Tesla CEO Elon Musk responded to a SEC request that a federal court sentence him with contempt for violating a settlement agreement. In the filing, Musk claims that the restrictions on his tweeting amount to an "unconstitutional coup" by the SEC and that he did not even violate the agreement anyway.
The battle in federal court is the latest episode of a saga that began last August when Musk tweeted that he was "considering making Tesla a $ 420 private matter" and that he got funding. He did not get any funding, Tesla did not go private, but his share price went crazy. The SEC was furious and tried to prevent Musk from running an open society. Musk was a rider on this subject until he was over and eventually settled with the regulator, agreeing to pay a $ 20 million fine, resigning from his position as chairman of the Tesla board and manage all the tweets from the lawyers before posting.
In February, Musk proceeded to tweet that "Tesla made 0 cars in 2011, but that it will make about 500,000 in 2019." Noting that the tweet was not accurate, he did a follow up four hours later, stating that & # 39; He wanted the Tesla plant to reach an annualized production rate of 500,000 cars in 2019. But only deliver about 400,000 models. A few days later, the SEC said that it should be held in contempt of court because it "has not requested or received prior approval prior to the publication of this tweet, which was inaccurate and spread to more than 24 million people ".
In their response on Monday, Musk's lawyers said the case was "a series of celebratory tweets, expressing his enthusiasm for Tesla's success since 2011 and his pride in what Tesla expected to achieve in 2019." They claimed that Musk had simply "used his discretion." determine that the "tweet was not important" in the Settlement Agreement and that the production figures were already publicly available to the extent that they were included in an appeal for results and a filing with the SEC. To prove that he is doing his best to comply with the agreement, Musk wrote that he had halved his "average monthly tweets related to Tesla".
In an interview with 60 Minutes last December, Musk was asked about how Tesla could determine which of his tweets could potentially change the share price of the company. "Well, I guess we could make mistakes," he replied. This type of uncertainty led Musk's lawyers to claim that the settlement constituted a violation of their client's first amendment rights. They wrote that the SEC's interpretation of the regulations prevented Musk from talking about Tesla's activity in general. "Musk never consented and would not consent to such a gag order."
The heart of the conflict is that the SEC does not define what Musk can not tweet, but she says that if he tweeted something that could displace the Tesla stock without proper communication with investors, he incurs consequences he's not doing it. t approved by Tesla's lawyers. In this case, the tweets arrived after normal business hours and had no noticeable effect on the Tesla shares, but investors are still not happy and sue him for tweeting "repeated inaccuracies ".
Since he's reluctantly agreed to settle with the SEC, Musk has shown contempt for the agency. He said 60 minutes that he has no respect for the regulator and later claimed that his 420 tweet was worth a fine of $ 20 million. In its motion for contempt of court, the SEC cites the 60 minutes interview as an example of Musk not being diligent in his efforts to comply with the settlement. In their response on Monday, Musk's lawyers claimed the contempt charge "smacked of vengeance and censorship".
What kind of consequences would Musk face for his stubborn insistence on his right to tweet everything he wants? According to the Washington Post, the SEC could impose more fines or more restrictions on its activity on social media. Peter Haveles, a lawyer with law firm Pepper Hamilton, told Wired that, if the SEC's claim for contempt was upheld, "it is highly likely that the district court will fine M Musk and leaves him on a short leash. , with a firm warning that further violations could result in Mr. Musk's ban for a period of time as an officer or director of a public company. "
While it's maddening to see a manager in two big companies risk everything, because he's addicted to the job, it's also a bit encouraging. Most of us do not have billions of dollars and the freedom to do almost anything we want. Elon Musk does, and what he wants to do, is tweet. Everyone can tweet. So, the next time you post a message that makes you proud, do you think: "What I'm feeling right now is perhaps the most joyous feeling that Elon Musk can imagine." Money does not can not buy happiness, but this little dopamine rush of a retweet is everything.
[SDNY via Washington Post]
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