Elon Musk ordered to tell judge why he's not in contempt

Elon Musk ordered to tell judge why he's not in contempt

The Securities and Exchange Commission sought the order following a February 19 tweet from Musk about auto production numbers that was not approved by a Tesla lawyer. Musk faces potential punishment if he is found to be in contempt.

Erik Gordon, a University of MI law and business professor, doesn't believe that that will happen, "because what Musk did was not enormous and it was quickly corrected".

"I think it's only a matter of time before the nuclear option is invoked and upheld because Musk just will not constrain himself", Gordon said. The SEC deemed these statements "false and misleading" and sued the Tesla and SpaceX chief in September. He later backed off that buyout idea, but regulators concluded he had never lined up the money to pull off the deal that probably would have required at least $25 billion to complete.

His social-media minder didn't bless a February 19 tweet that boasted the electric-car maker would produce 500,000 vehicles this year. He tweeted again later that he "meant to say" weekly production would equal to half-a-million cars. According to SEC, the billionaire published a projection tweet that wasn't approved by his company.

According to Lutzker, who now works for the law firm Davidoff Hutcher & Citron LLP, it's not necessarily the substance of the tweet that's problematic - it's the fact that Musk didn't clear it before he hit send. Both Feb. 19 tweets occurred while the USA stock market was closed.

But those factors evidently didn't sway the SEC, which illustrated Musk's allegedly contemptuous behavior with some of the comments he made during a television interview with "60 Minutes" that aired December 9. Both Tesla and Musk were also fined $20 million each, a cumulative total of $40 million.

The SEC motion filed this week could throw the electric auto maker into chaos at a time when it is under pressure to repay hundreds of millions of dollars in loans due in coming months. "I do not respect them".

The sitter-whose official title at Tesla is alternately Disclosure Counsel or Designated Securities Counsel-did step in after seeing the offending tweet, arranging to meet Musk to draft a clarifying post. Four hours later, Musk tweeted that he "meant to say" the company's weekly production rate would equal up to about 500,000 on an annual basis but that the total vehicle deliveries this year would be closer to about 400,000. 25, 2019 in NY resurrects a dispute between the Securities and Exchange Commission and Musk that was supposed to have been resolved with a settlement reached five months ago.

"If the SEC were to seek Mr. Musk's removal (perhaps subject to yet another settlement), we believe the shares may approach the mid-$200 levels".

After trading lower Tuesday morning, Tesla shares were lately holding steady at $299.

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