A U.S. District Judge Tuesday granted the Securities and Exchange Commission permission to respond to Tesla’s CEO Elon Musk’s claim that his February tweet on the electric car maker’s production plans was not in violation of his fraud settlement.
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“If he is going to argue as his lawyers did in part in the document they filed yesterday, that he has a first amendment right to say whatever he wants, he doesn’t because he gave that right up when he entered into a consent decree with the SEC over the comments that he made last year,” Fox News senior judicial analyst Judge Andrew Napolitano said during an interview on “After The Bell” Tuesday.
The filing says Musk’s February 19th tweet “did not contain information that could reasonably be considered material” to Tesla and wouldn’t necessarily impact the stock, but Napolitano dismissed those claims.
“It’s legit to make that argument, but I think he is going to lose,” the Judge said. “I would have advised against making those arguments. I would have advised a ‘mea culpa’ and ‘I won’t do it again.’”
U.S. District Judge Alison Nathan gave both parties until March 26th to request an evidentiary hearing.
“This time he’s going to get his fingers burned – which means a fine and more restraints, not jail time – but a fine and more restraints as to what he is allowed to say publicly,” Napolitano predicted.