With many of them making promises or alluding to future Tesla developments (many of which did not come true) it’s caught the ire of regulators who are concerned about this conduct.
As the Securities and Exchange Commission (SEC) and Musk went to court again for his tweets, a federal judge ended up approving a new settlement between the two groups, with Musk no longer being on the hook for potential charges.
According to a court filing, the two parties agreed to change their original settlement to be much more precise about what sort of comments Musk needed to be pre-approved by lawyers before tweeting them to the public.
Previously, the settlement said that any sort of material statements had to be viewed by an experienced securities lawyer, but Tesla’s CEO argued that the original settlement also gave him the ability to judge whether a statement was “material” or not before showing them to a lawyer.
In the end, the eccentric CEO got off the hook as a new reworked settlement left no wiggle room going forward. Now, there is a long list of specific Tesla metrics that need to be shown to a lawyer before Elon Musk can share them to the public.
This includes production forecasts, delivery figures, potential mergers, new products, non-public filings, and other areas. While the list was fairly extensive, a footnote in the settlement mentioned that it wasn’t an exhaustive list by any means that there were still topics that could be deemed “material.”
For regulators, this was somewhat of a disappointing development as Musk has a long list of tweets over years making these kinds of statements. Some argue that were it any other CEO (or even a different regulatory landscape such as in the 1980s and 1990s) Tesla’s CEO would already be in jail.
SEC commissioner Rob Jackson expressed his disapproval of the deal. “As a policy matter, those who settle cases with the SEC must be held to the bargain they struck. Given Mr. Musk’s conduct, I cannot support a settlement in which he does not admit what is crystal clear to anyone who has followed this bizarre series of events: Mr. Musk breached the agreement he made last year with the Commission — and with American investors,” he said according to MarketWatch.
Time will tell whether Musk will be more careful this time in terms of what he tweets to the public. However, it’s pretty clear that he’s not going to get any more chances.
Tesla Company Profile
Tesla Inc is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. It sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities.
The Tesla Roadster debuted in 2008, Model S in 2012, Model X in 2015, and Model 3 in 2017. Global deliveries in 2018 were 245,506 units. Tesla went public in 2010 and employs about 50,000 people. – Warrior Trading News