By Jonathan Stempel
NEW YORK (Reuters) – Elon Musk’s lawyers said that the U.S. Securities and Exchange Commission failed to satisfy its heavy burden of showing that the Tesla Inc chief executive should be held in contempt, and the tweet prompting its contempt motion was both proper and not material.
In a Friday filing in Manhattan federal court, Musk’s lawyers also said their client “respects his obligations” to the electric car company, its shareholders and the court.
Musk is trying to avoid being held in contempt for violating his October 2018 fraud settlement with the SEC, for having tweeted at 7:15 p.m. EST on Feb. 19 to his over 24 million Twitter followers that Tesla could build around 500,000 vehicles in 2019.
The SEC did not immediately respond to requests for comment.
Musk’s settlement, which included $20 million in civil fines for both him and Tesla, resolved an SEC lawsuit over another Twitter post in which Musk said he had “funding secured” to take his Palo Alto, California-based company private.
The SEC said Musk violated that settlement by sending the tweet about Tesla’s production outlook without first seeking approval from the company’s lawyers.
But in Friday’s filing, Musk’s lawyers said the SEC had conceded during settlement talks that his Tesla-related tweets were not subject to a “broad” pre-approval requirement.
They also said the tweet was not material because it simply restated old news, used generalities, was “aspirational and optimistic,” and did not move Tesla’s share price.
(Reporting by Jonathan Stempel in New York, editing by G Crosse)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Mar 23, 2019 05:05:15 IST