“He once again published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with Internet access,” the SEC said in court papers filed in Manhattan federal court.
Tesla shares plunged as much as 5.4 percent as of 6:30 p.m. ET Monday in New York. The stock was already down 10 percent this year through the close of regular trading.
Calls to Tesla and emails to Musk and his representative weren’t immediately returned.
“They have to view the conduct as akin to another violation of securities laws to take this step,” Bennett said. “It’s a very novel situation where someone is running an enterprise with this kind of market cap and gives the SEC cause for concern that the person is not capable of following the securities laws.”
The earlier settlement grew out of a September lawsuit filed by the SEC claiming Musk misled investors when he tweeted he had funding secured to take the company private. The accord required Musk and the company to each pay a $20 million penalty and also removed him from serving as chairman for at least three years.
In its latest filing, the SEC said that after Musk sent an initial tweet at 7:15 p.m. ET on Feb. 19, a company securities lawyer immediately set up a meeting with him to draft a correction. Musk tweeted the correction more than four hours later: “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k”
The next day, Tesla announced that its general counsel was leaving, just two months after the company hired him.
Source: Auto News