Tesla, Elon Musk Contempt Charges and Arbitration
Feb 26, 2019 –The U.S. Securities and Exchange Commission asked a judge to hold Elon Musk in contempt for violating last year’s settlement with the agency, raising new a round of regulatory issues for the embattled Tesla Inc. CEO.
The SEC claimed that a Feb. 19, 2019 tweet by Musk violated the settlement when he wrote that “Tesla made 0 cars in 2011, but will make around 500k in 2019.” The deal with the agency required him to seek pre-approval from the company for social media posts and other written communication that would be material to the company or investors.
“He once again published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with Internet access,” the SEC said in court papers filed in Manhattan federal court.
Shareholder activists have also organized into several groups seeking mandatory arbitration for securities laws (and other) violations. Tesla and Musk committed to arbitration in certain previous settlement negotiations.