Elon Musk Settles With SEC Over Twitter Use
Musk muzzled? CEO agrees to have financial tweets and statements vetted by legal counsel first
The angry exchanges between Elon Musk, the chief executive of electric car maker Tesla and the US Securities and Exchange Commission (SEC) could be coming to an end.
According to a court filing in Manhattan federal court, Musk has have restrictions placed on his use of Twitter, most notably submitting public statements about the company’s finances to vetting by its legal counsel.
Last December Musk had publicly admitted that he had “no respect” for the SEC, in his second attack on the US financial regulator after it forced him to step down as chairman of Tesla and pay $20m in penalties.
Legal vetting
Musk had come under fire for his outbursts on Twitter in 2018, such as his controversial comments about one of the rescuers of the Thai boy football team that were trapped in a cave in 2018.
But Musk really got into trouble in August 2018, when out of the blue, he tweeted that was considering taking Tesla private and that he had secured funding to do so.
Musk was almost immediately hit with two lawsuits which alleged that Musk’s Tweets were fraudulent effort to attack short sellers.
These tweets brought Musk to the attention of the SEC and it sued Tesla and sought to ban Musk from acting as an officer or director of a publicly traded company.
The SEC accused Musk of securities fraud, and alleged he made a series of “false and misleading” tweets about potentially taking Tesla private.
In the end Musk stepped down as chairman but was allowed to retain his role as CEO, but he also had to pay millions of dollars in fines.
New agreement
The agreement between Musk and the SEC still needs to be approved by a judge, according to Reuters. Musk will have to submit his public statements about the company’s finances and other topics to vetting by its legal counsel.
An agreement would mean the Tesla founder no longer faces contempt charges for violating an earlier settlement with the US financial regulator, which had required him to submit statements “material” to investors for prior review.
The SEC had accused Musk of violating that settlement in February after he tweeted about Tesla’s production numbers that had not been vetted by the company’s attorneys.
But going forward, Musk will have to have any statements vetted about Tesla’s financial condition, proposed or potential deals, production numbers, performance projections, financing or lending arrangements and Musk’s own transactions in the company’s securities.
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