Elon Musk and S.E.C. Reach New Accord, Lifting Cloud Over Tesla

If it was not already clear, securities regulators are giving Elon Musk, the chief govt of Tesla, a laundry record of issues he can not riff about on Twitter.

A revised settlement between Mr. Musk and the Securities and Exchange Commission, filed in federal court docket in Manhattan on Friday, spells out simply when Mr. Musk should “obtain the preapproval of any experienced securities lawyer” employed by Tesla earlier than posting on Twitter or different social media.

The record consists of feedback concerning the electric-car firm’s monetary situation, earnings forecast, proposed acquisitions and manufacturing knowledge. But it additionally covers remarks about “nonpublic legal or regulatory findings or decisions” and any occasion that Tesla must open up to the S.E.C. in a regulatory submitting.

A footnote to the settlement stated, “This list is not intended to be an exhaustive list of topics,” that means Mr. Musk is on discover to tread rigorously when speaking about something that might transfer the corporate’s inventory value.

The latest regulatory scuffle between the S.E.C. and Mr. Musk was prompted by a Feb. 19 Twitter post by Mr. Musk that included information, which had not been reviewed by a lawyer, about the number of cars Tesla would produce and deliver this year.

The commission contended that the post violated the terms of the October settlement, which followed the S.E.C.’s filing of a civil fraud complaint against Tesla and Mr. Musk over his declaration on Twitter that he had “funding secured” to take the company private at $420 a share. The prospect pushed Tesla shares sharply higher. But it turned out that Mr. Musk and Tesla were not actually close to reaching such a deal.

Under the original settlement, Tesla was required to establish procedures for vetting Mr. Musk’s written communications, including Twitter posts, that might contain material information about the company.

At the court hearing this month on the S.E.C.’s request for a contempt citation, John Hueston, a lawyer for Mr. Musk, argued that the settlement was imprecise and had resulted in a “murky policy” governing when Tesla’s lawyers had to review Mr. Musk’s posts. Cheryl Crumpton, a lawyer for the S.E.C., disagreed, but Judge Nathan indicated that she was inclined to agree with Mr. Hueston.

Mr. Musk, who attended the hearing but did not speak, nodded at some of the judge’s comments. He later issued a statement supporting her order directing the parties to revisit the settlement.

The Tesla chief executive has long feuded with the S.E.C., which he once derided on Twitter as the “Shortseller Enrichment Committee,’’ echoing his complaint that the bearish investors known as short-sellers spread damaging and false information about the company.

But putting the dispute behind him may have become more urgent in light of his company’s recent financial performance.

Source link Nytimes.com

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