On Tuesday, US regulators have stated that they have the authority to subpoena Tesla CEO Elon Musk concerning his tweets about Tesla and urged a federal judge not to let the executive get away with posting tweets about Tesla with ease. Elon Musk has defined the actions of the US regulators, which in 2018 demanded Musk get pre-approval for certain Tesla-related public communications, i.e. wild tweets that could affect stock price and shareholder value, as “harassment” and “unjustified action.”
Elon Musk’s Twitter Poll About his Tesla Stock Sales Dropped Tesla’s Shares
Moreover, Elon Musk had agreed to settle with the SEC back then, but last year came under fire again when he asked his followers on Twitter if he should sell 10% of his stake in Tesla, resulting in Tesla’s shares dropping sharply. Musk has since traded around $16 billion worth of stock. Shortly thereafter, in November, the SEC gave the subpoena to decide if Musk was conceding with the previous settlement concerning tweets about Tesla.
In response to the SEC’s inquiries, Musk has tried to terminate or revise the 2018 consent decree, as well as suppress a subpoena summoning records involving the November Twitter poll. “In 2018, to settle the SEC’s action against him, Musk agreed to comply with Tesla’s mandatory procedures requiring pre-approval of certain of his Tesla-related public communications,” wrote SEC regulator Melissa Armstrong in a filing in the federal court of Manhattan.
“Musk cannot now cast off the Amended Final Judgment simply because he has found complying with Tesla’s procedures to be less convenient than he had hoped, or because he wishes the SEC would not investigate whether Tesla’s disclosure controls and procedures are being maintained and followed.”
Musk Won’t be Free from Scrutiny, Claims US Regulators
In the settlement, Tesla and Elon Musk each paid a $20 million civil fine, and Musk stepped down as Tesla’s chairperson. Doubling down, the US regulators said that modifying the 2018 final judgment wouldn’t free Musk from scrutiny over his tweets about Tesla because as an officer of the company, “Musk would still be subject to Tesla’s disclosure controls and procedures.”