Mar 19, 2019

SEC: Elon Musk is in "blatant violation" of settlement agreement

Rebecca Falconer

Photo: JIM WATSON/AFP/Getty Images

Elon Musk was in "blatant violation" of a settlement agreement and his defense against being held in contempt "borders on the ridiculous," the Securities and Exchange Commission said in a court filing Monday.

Details: The SEC alleges Musk violated the terms after tweeting on February 19 that Tesla would build 500,000 cars in 2019. He quickly clarified in another tweet the company would build at an annual rate of 500,000 cars by the year's end but it would only build 400,000 cars in 2019. His attorney told a federal last week Musk's tweet was "immaterial." Lawyers for the SEC found it "stunning to learn" Musk had not sought pre-approval for his tweets about Tesla in the months since the court-ordered pre-approval policy went into effect.

Go deeper: Pro Rata Podcast: Elon Musk's surprise settlement

What they're saying: “Musk’s contention — that the potential size of a car company’s production for the year could not reasonably be material — borders on the ridiculous,” lawyers for SEC wrote. “His interpretation is inconsistent with the plain terms of this court’s order and renders its pre-approval requirement meaningless."

What's next: U.S. District Judge Alison Nathan, sitting in Manhattan, will decide if Musk should be held in contempt of court and whether he should be punished.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 9 a.m. ET: 1,216,422 — Total deaths: 65,711 — Total recoveries: 252,478 — Map.
  2. U.S.: Total confirmed cases as of 9 a.m. ET: 312,245 — Total deaths: 8,503 — Total recoveries: 15,021 — Map.
  3. Public health latest: CDC launches national trackers and recommends face coverings in public. Federal government will cover costs of COVID-19 treatment for uninsured. The virus is hitting poor, minority communities harder and upending childbirth.
  4. 2020 latest: "We have no contingency plan," Trump said on the 2020 Republican National Convention. "We're having the convention at the end of August."
  5. Business updates: Restaurants step up for health care workers. Employees are pressuring companies to provide protections during coronavirus.
  6. Oil latest: Monday meeting among oil-producing countries to discuss supply curbs is reportedly being delayed amid tensions between Saudi Arabia and Russia.
  7. Education update: Many college-age students won't get coronavirus relief checks.
  8. What should I do? Pets, moving and personal health. Answers about the virus from Axios experts — What to know about social distancing — Q&A: Minimizing your coronavirus risk.
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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