The U.S. Securities and Exchange Commission asked a judge to hold Elon Musk in contempt for violating his Oct. 16 settlement with the agency
Bloomberg News reported the news a bit ago. We’ve since obtained the agency’s complaint, though it is declining comment.
Tesla has yet to respond to our requests for more information.
At the crux of things: Last Tuesday night, Musk tweeted out to his 24 million followers that Tesla would make around 500,000 cars this year, correcting himself hours later to clarify that he meant the company would be producing at an annualized rate of 500,000 vehicles by year end.
The next morning, Tesla announced that its general counsel, Dane Butswinkas, is leaving after just months on the job.
Butswinkas had reportedly battled on Musk’s behalf with the SEC last year, after Musk infamously tweeted in August that he had “funding secured” to take the company private when he had not.
In the end, Musk and Tesla settled without admitting wrongdoing. Still, Tesla had to pay a $20 million fine; Musk had to agree to step down as Tesla chairman for a period of at least three years; the company had to appoint two independent directors to the board; and Tesla was also told to put in place a way to monitor Musk’s statements to the public about the company, including via Twitter.
In November, Tesla announced that Australian telecom executive and chair of Tesla’s audit committee Robyn Denholm would take over from Musk as chair of the company. In December, it appointed two independent directors to its board: Larry Ellison, executive chairman of Oracle, and Kathleen Wilson-Thompson, executive vice president of Walgreens Boots Alliance.
It’s Musk’s admission that he didn’t obtain pre-approval for his tweet last week that the SEC considers “clear and convincing evidence that he violated the court’s final judgement,” with the SEC adding in its filing that he has “not diligently attempted to comply” with that specific ruling.
Perhaps unsurprisingly, Musk hasn’t commented on the motion on Twitter, though he did write somewhat cryptically a couple of hours ago that “Fate loves irony. Frankly, too much.”
Musk was less circumspect last year, telling “60 Minutes” in a segment that aired in early December, “I want to be clear: I do not respect the SEC, I do not respect them.”
Fate *loves* irony. Frankly, too much.
— Elon Musk (@elonmusk) February 25, 2019
Typically, if a person is found to be guilty of contempt of court, he or she may face a fine, jail time, or other penalty.
You can check out the motion below.