NEW YORK (Reuters) – Lawyers for Tesla Inc Chief Executive Elon Musk will argue on Thursday that he did not violate a fraud settlement with the U.S. Securities and Exchange Commission and should not be held in contempt, the latest twist in a high-profile battle between the billionaire and the government.
Musk’s fight with the SEC, to play out in a Manhattan federal court hearing, has raised investor worries that it could lead to restrictions on his activities or even his removal from Tesla, while distracting him at a pivotal point in the electric car maker’s expansion.
Tesla - Reputation - Luxury - Cars - Production
Tesla, which built its reputation on luxury cars, has faced several production challenges with its Model 3 sedan, which it is counting on to reach the mass market, recently offering a version starting at $35,000.
The SEC on Feb. 25 accused Musk of violating his Oct. 2018 settlement by posting material information about Tesla on Twitter six days earlier, without first seeking approval from company lawyers.
Musk - Information
Musk has countered that the information was not material, and did not need to be vetted.
The battle concerns a tweet that Musk sent to his more than 24 million Twitter followers: “Tesla made 0 cars in 2011, but will make around 500k in 2019,” meaning 500,000 vehicles.
Hours - Musk - Production - Year - End
Four hours later, Musk corrected himself, saying annualized production would probably be around 500,000 by year end, with full-year deliveries totaling 400,000.
The SEC said the earlier tweet contrasted with Tesla’s Jan. 30 forecast that it would deliver about 400,000 vehicles this year.
Musk - Lawyers - Tweet - Forecast - Jan
Musk’s lawyers countered that the earlier tweet merely restated a forecast he had given on Jan. 30, when he said Model 3 production could total 350,000 to 500,000 vehicles.
They have also said the SEC had conceded during settlement talks that Musk did not need pre-approval for all tweets about his Palo Alto, California-based company.
Wake Up To Breaking News!