Attorneys for Elon Musk on Monday accused the Securities and Exchange Commission of “concerning and unprecedented overreach” in their effort to ask a federal judge to hold the Tesla Inc. chief executive in contempt of court.
In a court filing Monday, Musk’s attorneys defended his tweets and behavior, asking for the SEC’s request to be denied.
In the Feb. 19 tweets in question, Musk said: “Tesla made 0 cars in 2011, but will make around 500k in 2019,” clarifying a few hours later: “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.”
Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.
— Elon Musk (@elonmusk) February 20, 2019
The SEC claimed that violated an agreement from last fall, when Musk settled an SEC fraud investigation over another tweet. As part of that deal, Musk agreed that Tesla would have oversight and pre-approval over his tweets that are material to the company. He also agreed to pay a $20 million fine — Tesla was also fined $20 million — and gave up his seat as Tesla chairman.
“He once again published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with internet access,” the SEC said in a court filing on Feb. 25.
In Monday’s filing, Musk’s attorneys said the case was much ado about nothing. “Musk correctly used his discretion to determine that his … tweet was not material and did not contain information that could reasonably be considered material,” they wrote. “Here, the tweet was simply Musk’s shorthand gloss on and entirely consistent with prior public disclosures detailing Tesla’s anticipated production volume.”
The lawyers added that even if the tweet could be considered material, Musk’s effort to quickly clarify it showed he was not trying to be misleading.
“The SEC has not cited . . . any prior case in the last decade where the SEC has sought a contempt order to enforce the type of injunction at issue here. This case should not be the first,” they wrote.
have fallen 12.6% year to date, compared to the S&P 500’s