Elon Musk counters at SEC, calls its movement a ‘power grab’

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A tweet from Elon Musk has actually landed the Tesla CEO in hot water yet once again.

On Monday, Musk’s attorneys safeguarded Musk in a 33-page court filing over the CEO’s Feb. 19 tweet declaring Tesla would make 500,000 vehicles in 2019.

An arrangement struck last September in between Musk and the Securities and Exchange Commission (SEC) prohibited the CEO from utilizing social networks to disclose info product to financiers. The SEC in late February moved to hold Musk in contempt of court for breaching that arrangement with his tweets about Tesla’s production quotes.

“Tesla made 0 cars in 2011, but will make around 500k in 2019,” Musk tweeted. He clarified about 30 minutes later on, “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.”

In the Monday filing, Musk’s attorneys mentioned there’s “no basis to issue contempt sanctions against him” and calling it an “unconstitutional power grab.”

The Feb. 19 tweet “did not contain information that could reasonably be considered material,” the filing argued.

As part of his handle the SEC, Musk has actually consented to look for preapproval for tweets that might impact Tesla’s market potential customers. Musk got no such approval for the Feb. 19 tweet, however the filing argued that the tweet followed formerly public info. 

“The tweet was simply Musk’s shorthand gloss on and entirely consistent with prior public disclosures detailing Tesla’s anticipated production volume,” the filing read. Back in February, the news of the SEC’s demand triggered Tesla’s shares to sink by as much as 4.6 percent in after-hours trading. As the court filing kept in mind, Musk’s Feb. 19 tweet triggered no “notable” motion.

Musk’s issues with the SEC started last August, when he tweeted: “Am considering taking Tesla private at $420. Funding secured.” That totaled up to an incorrect and deceptive declaration to financiers and the general public, according to the SEC. The occurring legal fight caused the abovementioned arrangement — along with Musk stepping down as chairman of Tesla’s board and paying a $20 million fine.

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