Elon Musk, SEC reach agreement over Tesla CEO's Twitter usage
Tesla CEO Elon Musk reached a deal with the U.S. Securities and Exchange Commission on Friday over his use of Twitter, according to a filing in Manhattan federal court.
The late Friday agreement set new parameters for what Musk cannot post about on social media without pre-approval from a securities lawyer. The list is long but includes a slew of topics about Tesla’s business, including its financial condition, earnings and guidance; potential mergers or acquisitions; production numbers or sales; projections or estimate numbers; or new or proposed business lines unrelated to already existing business lines.
Musk and the SEC’s most recent feud began in mid-February after federal regulators accused him of violating an earlier settlement when he tweeted about the Tesla’s 2019 production targets. The SEC argued the tweet did not receive the necessary pre-approvals mandated in the earlier settlement -- a result of Musk abruptly tweeting last year that he was considering taking Tesla private at $420 per share.
Regulators alleged he intentionally misled investors. Musk paid a $20 million fine to settle the case and agreed to have his social media interactions overseen by Tesla attorneys. He was also removed as the chair of Tesla’s board for at least three years.
The new agreement is a victory for Musk, who was likely facing hefty fines as a result of the allegations. Elliot Lutzker, a former SEC prosecutor, previously told FOX Business that regulators could slap Musk with a fine higher than the previous $20 million -- and possibly even ask him to step aside as CEO for up to two months.
Tesla declined to comment on the most recent developments. Shares of the electric-car maker climbed in after-hours trading on Friday.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 357.09 | +11.93 | +3.46% |
U.S. District Judge Alison Nathan still needs to approve the deal for it to supersede the previous one. Nathan previously gave Musk and the SEC two weeks to work out an agreement after a federal court appearance.
“The tweet in question was true, immaterial to shareholders and in no way a violation of my agreement with the SEC,” Musk said at the time. ”We have always felt that we should be able to work through any disagreements directly with the SEC, rather than prematurely rushing to court.”