Elon Musk’s lawyers suggest SEC engaging in 'unprecedented overreach'
Lawyers for Tesla CEO Elon Musk claimed tweets sent out last month by the electric-car maker’s executive did not violate a court order.
In a filing made late Monday, Musk’s lawyers said the Securities and Exchange Commission (SEC) had not proven the posts contained material content – which would require them to have been preapproved as part of a settlement struck with the body last year. His representatives went further to suggest the SEC was potentially violating Musk’s First Amendment rights by suggesting that he seek preapproval for any Tesla-related tweet.
Musk’s lawyers claimed he had dramatically reduced his volume of tweets “generally” and regarding Tesla “in particular.”
Musk’s legal team went even further, alleging the SEC’s “unprecedented overreach” regarding the contempt motion were driven from comments the CEO made during a “60 Minutes” interview, where he said he did not respect the SEC.
The controversy pertains to a post Musk fired off last month, saying the company would make about 500,000 cars this year. He later had to correct the language of the tweet, to say by the end of the year the annualized production rate would probably hit 500,000, with 400,000 deliveries.
Musk was required as part of a settlement reached with the SEC last year – over "misleading" tweeted claims about having secured funding to take the company private – to have social media posts containing material content approved before sending them. He was also required to step down as chairman of the company’s board and pay a $20 million fine.
Regulators allege that he did not have the recent tweets in question preapproved. He had until the end of day on Monday to explain why he thought he should not be held in contempt of court.
Musk has lashed out at the SEC throughout recent months, referring to the agency as the “Shortseller Enrichment Commission.” More recently he claimed something was “broken with SEC oversight.”
On Sunday, Tesla changed course on previously announced plans to shift toward online-only sales, announcing it would keep “significantly more stores open.” As a result of keeping more stores open, Tesla is going to raise vehicle prices by about 3 percent across the globe.
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Buyers have a week to place orders before prices rise on March 18. The cheapest version of the Model 3, which carries a base price of $35,000, will be unaffected by price hikes.
Meanwhile, as previously reported by FOX Business, the Department of Defense is considering revoking Musk’s security clearance for his SpaceX venture after he smoked marijuana during a podcast interview.