The SEC wanted a judge to hold him in contempt.
Elon Musk quietly accepted their judgement and … just kidding. In a court filing, on the day of the deadline for his response, the Tesla CEO accused the SEC of “unprecedented overreach,” warned that his First Amendment rights were at risk of being violated, and patted himself on the back for “dramatically” reducing “his volume of tweets.”
So, let’s break this down. After the infamous “funding secured” tweet, Musk reached a settlement with the U.S. Securities and Exchange Commission (SEC) that required him to get pre-approval from Tesla before sending out tweets “that contain, or reasonably could contain, information material” to the company or its shareholders.
He then proceeded to tweet this:
Tesla made 0 cars in 2011, but will make around 500k in 2019
— Elon Musk (@elonmusk) February 20, 2019
The SEC argued that disclosing those production numbers violated their agreement, which is probably why Musk later clarified in a tweet that Tesla wouldn’t make 500,000 cars by the end of 2019. Instead, he explained, it was making 10,000 cars a week — which would put it on pace for more than 500,000, but, seeing as they were making fewer cars earlier in the year, Tesla would only deliver 400,000 cars in 2019.
In the court filing, Musk’s legal team argues the tweet was “celebratory, aspirational, and forward-looking” on numbers already disclosed to investors.
Also, Musk didn’t have to get Tesla’s approval for his tweet, because he’s allowed to “exercise his reasonable discretion” on whether “his communications contain information requiring pre-approval.” So, you see, because he didn’t think the tweet needed to be approved, it didn’t need to be.
Also, he’s tweeting so much less! In the three months after the SEC order, he “cut his average monthly Tesla-related tweets nearly in half.” That “self-censorship” — that’s right, Musk has been censoring himself — shows how “committed” he is to the agreement.
And if the SEC forced Musk to “seek pre-approval of any tweet that relates to Tesla, regardless of its significance, prior dissemination, or nature,” it would “violate the First Amendment.”
The court filing continued: “This contempt action, following Musk’s sincerely-held criticism of the SEC on 60 Minutes, also reflects concerning and unprecedented overreach on the part of the SEC.”
Seems like a lot of trouble compared to, you know, not tweeting or having someone look at your tweets beforehand, but hey, I never launched a rocket into space so what do I know.