The US securities watchdog has alleged Tesla’s lawyers failed to review some of Elon Musk’s tweets — twice violating the maverick billionaire’s settlement agreement, reports Wall Street Journal.
Tesla and the Securities and Exchange Commission (SEC) struck a deal in 2019 demanding direct oversight of Musk’s social media posts.
The SEC found Musk’s infamous “taking Tesla private at $420” series of tweets a year earlier directly boosted the company’s share price. Tesla stock plummeted after the market realised Musk was only joking.
Musk’s settlement with the SEC stipulated that a company lawyer must approve Musk’s Tesla tweets. Musk also stepped down as company Chairman.
In February 2019, SEC and Musk agreed to modify the original agreement to specify which topics require pre-approval.
Those topics include Tesla’s production figures, new business lines, and finances — not Bitcoin or Dogecoin.
But WSJ (citing records obtained via Freedom of Information Act requests) noted regulators sent Tesla stern letters claiming lawyers skirted their responsibility between August 2019 and June 2020.
In particular, the SEC said Musk’s Tesla tweets concerning production volumes of solar roofs — and Tesla’s share price — were posted without any legal oversight.
It was just like, Musk’s opinion, man
The SEC reportedly told Tesla it hadn’t properly enforced “these procedures and controls despite repeated violations by [Musk],” and that “Tesla has abdicated the duties required of it by the court’s order.”
In response, Tesla reportedly told the SEC that lawyers didn’t see reason to “review” the “stock price is too high imo” tweet as it was Musk’s personal opinion.
Tesla then claimed there were no records related to the tweet when requested by the SEC. The SEC replied:
“In the face of [Musk’s] repeated refusals to submit his covered written communications on Twitter to Tesla for pre-approval, we are very concerned by Tesla’s repeated determinations that there have been no policy violations because of purported carve-outs.”
Tesla tweets replaced by Bitcoiner bait
Tesla lawyer Alex Spiro reportedly fought back by claiming the SEC was out to “harass Tesla and silence [Musk].”
According to WSJ, the SEC effectively gave up last June by urging Tesla to prevent “further shareholder harm” by implementing and enforcing “disclosure controls and procedures.”
Musk has tweeted about crypto a lot in recent months, showing real influence on the market, particularly Bitcoin and Dogecoin.
Tweets about Tesla’s production numbers — or its share price — are noticeably absent from Musk’s timeline.
Seemingly, those tweets have been replaced by engagement bait specifically for Bitcoiners. The last time Musk tweeted about “Tesla stock” was in July 2020.
The SEC is clearly watching, but whether they really care is another story.