The SEC has reportedly told Tesla that the company violated a court-ordered policy to oversee tweets by CEO Elon Musk. According to a court decision, Musk’s tweets about Tesla were supposed to be approved by a company lawyer, which Musk critics labeled his “Twitter Sitter.”
The Wall Street Journal reports that securities regulators told Tesla last year that company CEO Elon Musk’s use of Twitter had twice violated a court-ordered policy requiring Musk’s tweets about the company to be preapproved by company lawyers. Tesla and the SEC settled an enforcement nation in 2018 alleging that Musk had committed fraud by tweeting about a potential buyout of his company.
Musk paid $20 million to settle the case and Tesla also paid $20 million. Musk also agreed to have his public statements on social media overseen by Tesla lawyers. In letters sent to tesla in 2019 and 2020, the SEC stated that tweets Musk wrote about Tesla’s solar roof production volumes and its stock price had not undergone the required preapproval by Tesla’s lawyers.
The communications highlight the running tensions between the SEC and Musk, who has previously mocked regulators even after setting fraud claims with the agency. The SEC told tesla in May 2020 that the company had failed “to enforce these procedures and controls despite repeated violations by Mr. Musk.”
The letter was signed by Steven Buchholz, a senior SEC official in its San Francisco office. The letter added: “Tesla has abdicated the duties required of it by the court’s order.”
The SEC had trouble enforcing the tweet preapproval clause almost from the beginning. The SEC accused Musk of violating the rules in February 2019 and asked a Manhattan federal court to consider holding him in contempt. The judge signaled she wanted the two sides to settle the dispute and the SEC agreed to modify the policy by clarifying which topics required pre-approval. This included communications about production figures, new business lines, and the company’s finances.
Within months, the SEC contacted Tesla again questioning a tweet from Musk that stated: “Spooling up production line rapidly. Hoping to manufacture ~1000 solar roofs/week by end of this year.” The tweet fell under requirements to vet any public messages that addressed “production numbers or sales or delivery numbers,” the SEC wrote in an August 2019 letter to Tesla.
Tesla told the agency that the tweet did not require authorization as it was “wholly aspirational,” according to the SEC.
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com
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