A New York judge has been asked by the US financial regulator to hold Elon Musk in contempt for violation of a settlement over comments on social media. The SEC makes this move after Tesla boss tweeted about production of the car firm. Musk has agreed last year to not say anything about financial performance of Tesla without reaching an agreement with the company before. That settlement came after his August tweets about privatization of Tesla. Neither Musk nor Tesla said anything about the SEC’s move.
Price of Tesla’s share fell 5% during after-hours Wall Street trading. Musk posted an aerial image last week of thousands of new Tesla cars, saying that he expects the company to manufacture 500,000 vehicles in 2019. The Securities and Exchange Commission filed court papers on Monday in New York stating that Musk had violated the terms of his agreement by posting the image without prior consent from the company. The commission also noted that Musk’s post had been disseminated to over 24 million individuals. The motion filed in the Manhattan federal court by the SEC stated that Musk has breached the Final Judgment of the Court by engaging in that very conduct which the preapproval provision of the Court’s Final Judgment had been designed to prevent.
Earlier in August Musk had tweeted about how he had secured funding for Tesla’s privatization and had got into troubled waters as shares began soaring following his comment but only weeks later, he backed away from the plan following feedbacks from shareholders. Musk and Tesla were ordered by US authorities to pay fines worth $20 Million. Furthermore, Musk had to give up his position as chairman for 3 years but he remained defiant while investors demanded stronger oversight because of Musk’s erratic behavior. He also said in an interview that he did not respect the SEC at all and had agreed to pay the settlement fines only because of his belief in the justice system.