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Tesla’s Elon Musk May Be In Contempt Over Tweet

Musk In Hot Water Over Social Media The US financial regulator has asked a New York judge to hold Tesla boss Elon Musk in contempt for violating a settlement...

Musk In Hot Water Over Social Media

The US financial regulator has asked a New York judge to hold Tesla boss Elon Musk in contempt for violating a settlement over social media comments. The move by the Securities and Exchange Commission (SEC) comes after he tweeted about the car firm’s production.

Last year, Musk agreed that he would not make statements about Tesla’s financial performance without prior agreement with the company. That settlement followed his tweets in August about taking Tesla private.

There was no immediate comment from either Tesla or Musk on the SEC’s move. Tesla’s share price fell 5 percent in after-hours trading on Wall Street. Last week Musk posted an aerial picture of thousands of new Tesla vehicles and said that he expected the firm to make 500,000 cars in 2019.

In court papers filed in New York on Monday, the SEC said Musk did not get approval before publishing the tweet which was inaccurate and in breach of Musk’s agreement. The SEC noted that the tweet was disseminated to more than 24 million people.

“Musk has thus violated the Court’s Final Judgment by engaging in the very conduct that the pre-approval provision of the Final Judgment was designed to prevent,” the SEC wrote in its motion filed on Monday in federal court in Manhattan.

Tesla has endured a difficult period, following comments Musk made on social media in August suggesting he had “funding secured” for a deal to take Tesla private. Its shares soared in response to those comments but weeks later Musk backed away from the plan, after feedback from shareholders.

US authorities ordered Tesla and Musk to pay a $20 million fine. Musk was also obliged to relinquish his role as chairman for three years.

But he has remained defiant, while investors have also called for stronger oversight after his erratic behavior attracted attention. In media interviews he said he often slept on a sofa in the Tesla office and in an online video he briefly smoked marijuana.

Musk said in an interview with news channel CBS that he has “no respect” for the SEC, but that he had chosen to pay the settlement fine because he believed in the justice system.

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