Elon Musk vs. the SEC
Elon Musk could face serious consequences if Judge Alison Nathan sides with regulators and finds that Musk broke the settlement he agreed to in October 2018.
From Peter Haveles, partner in the trial and dispute resolution group at the law firm Pepper Hamilton:
On the list of potential consequences, according to experts:
- A fine
- A limit on social media
The SEC hasn't said what penalties it will seek if Musk is found in contempt. But it previously sought to remove Musk as CEO.
"We expect the debate of whether Tesla is better off without Musk will return," Munster said in a blog post shortly after yesterday's SEC announcement.
He labeled Musk's behavior as "careless" and said:
But Munster still believes that Musk is irreplaceable. Staying with Tesla would be a net positive for the company, Munster says. His product vision, focus on pace of innovation and delivering great customer experiences are not easily replicated.
A federal judge has given Tesla (TSLA) CEO Elon Musk a March 11 deadline to explain why he shouldn't be held in contempt, according to new a court filing.
Here's the order:
Tesla (TSLA) CEO Elon Musk fired back after yesterday's Securities and Exchange Commission decision.
He tweeted that something is broken with the agency:
This is his second response since the SEC asked a judge yesterday to hold Musk in contempt for violating a settlement deal reached with the powerful regulator last year. He earlier cited a Tesla earnings transcript about production numbers.
Musk said in September that he had secured funding to take Tesla private at $420 a share. But he had not secured the funding, according to the SEC.
Tesla (TSLA) shares are down nearly 4% in premarket trading.
- The Securities and Exchange Commission asked a judge yesterday to hold CEO Elon Musk in contempt for violating a settlement deal reached with the powerful regulator last year.
- The SEC says Musk violated the agreement by tweeting inaccurate information about Tesla production levels without first seeking approval from his lawyers.
The Securities and Exchange Commission asked a federal judge on Monday to hold Tesla (TSLA) CEO Elon Musk in contempt for violating a settlement deal reached last year.
Musk tweeted on February 19 that "Tesla made 0 cars in 2011, but will make around 500k in 2019." Hours later, Musk sent a follow-up tweet indicating that the company will actually deliver just 400,000 cars this year.
Although Musk corrected his mistake, regulators scolded Tesla's billionaire CEO because he "once again published inaccurate and material information about Tesla to his over 24 million Twitter followers," according to court papers filed Monday.
The SEC noted that he did not ask for or receive company approval before publishing his tweet.
A number of high-profile executives have left Tesla (TSLA) and CEO Elon Musk over the past year:
- February 2019: Top lawyer Dane Butswinkas left after only two months on the job.
- September 2018: Chief accounting officer Dave Morton left after just one month. In the same month, Tesla's chief people officer and VP of worldwide finance and operation also exited.
- July 2018: Senior VP of Engineering Doug Field left and returned to his job at Apple (AAPL). He announced a few months prior that he had to take "time off to recharge."
- March 2018: Eric Branderiz, who was Morton's predecessor as chief accounting officer, left after just 17 months on the job.