Tesla Chief Executive Elon Musk slammed the U.S. Securities and Exchange Commission in a tweet on Tuesday, one day after the federal agency alleged that he violated a settlement when he tweeted in February about the electric-car maker’s 2019 production targets.
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“Something is broken with SEC oversight,” he wrote.
Musk and the SEC settled securities charges in October, months after he abruptly tweeted in August that he was considering taking Tesla private at $420 per share and had already secured the funding (Tesla shares soared upon the initial tweet, rising more than 10 percent).
Per the terms of the settlement, an independent person replaced Musk, who will be ineligible for reelection for the next three years, as chair of the company. Tesla was also required to appoint two new independent directors to its board, in addition to putting into place controls to oversee Musk’s communication. Both Tesla and Musk were also fined $20 million each.
Now, in federal filings, the SEC has accused Musk of violating those terms when he tweeted that Tesla would produce 500,000 cars in 2019, a figure he later clarified would be closer to 400,000. The SEC determined that the intiial tweet was not approved by Tesla before it was sent, according to the filing.
In response, Musk said the SEC “forgot to read Tesla earnings transcript” -- referring to the company’s fourth-quarter earnings call -- in which he told investors that Model 3 output would reach 500,000 “sometime between Q4 of 2019 and Q2 of 2020.” The SEC, however, argued that there was no “pre-approved written communication” that said Tesla would produce 500,000 vehicles by the end of 2019.
It’s not the first time that the Musk and the SEC have gone head-to-head: In October, the eccentric billionaire mocked the agency as the “short-seller enrichment commission.”