New York, – The founder of Tesla, Elon Musk, has raffled on Thursday the imposition of new sanctions for the dissemination of tweets on Tesla, but must reach a commitment to the US Securities and Exchange Commission. (SEC, in its acronym in English) so that your statements do not exasperate this body.
This was determined by the judge of the court of South New York Alison J. Nathan after a two-hour hearing in which Musk entered with a serious face, dressed in black and accompanied by the three lawyers of his defense team.
The SEC accused Musk of making inaccurate statements without also having the explicit approval of the company’s management, and asked the judge to impose a multi-million dollar fine to prevent this action from repeating itself.
On February 19, Musk launched a tweet in which it claimed that Tesla would produce around 500,000 vehicles this year. Subsequently, the businessman rectified and explained that in reality Tesla would reach an annual production rate of 500,000 vehicles by the end of 2019.
The SEC denounced that with this message Musk had violated an agreement reached between both parties on September 29 of last year for which the employer had promised to be supervised by Tesla in his “material” statements about the car company and that could affect to the quotation of shares on the Stock Exchange.
Specifically, the SEC contends that Musk’s statements “could reasonably contain” substantial material information about Tesla that had been published without the specific approval of the company’s management.
Precisely, the interpretations of the terms “material” and “immaterial”, as well as the concept “could reasonably contain” seem to have been what ultimately saved Musk, since the judge has agreed that they are not clear, despite the fact that part of the audience, two hours, revolved around trying to clarify its precise meaning.
In this way, Nathan concluded that the only way to prevent both parties from returning to appear before a court is to clarify the terms and reach a new commitment, so he gave them until April 18.
The togada demanded that they meet as soon as possible and that they send the conclusions in a joint letter in two weeks, in which they must “resolve clearly” the issues that led them to testify today.
The SEC insisted before Nathan that Musk had cheated and requested that measures be taken, among which he proposed a multi-million dollar fine, to prevent this type of publication from happening again in the future.
However, the defense argued that Musk’s statements did not need approval because they had been previously published by the company and did not offer “material” information about the company that was not known in advance.
Under the watchful eye of Musk, who nodded when he considered his lawyer’s argument successful and on several occasions passed him written notes, the defense insisted that Musk had acted in good faith and had shown restraint, as he had agreed with the SEC in September 2018.
However, despite insisting on the innocence of his client, the defense expressed in favor of reaching a new agreement to avoid new “misunderstandings”, a proposal praised by the judge before announcing his decision and insist on “seriousness” of the subject
Parallel to the oral hearing, which was followed with great expectation and a large number of journalists who filled the courtroom where it was held, Tesla shares fell 8% today on Wall Street.
This steep decline came after the quarterly figures of the company were known, below what was expected, which made analysts question whether they can meet their commitments to deliver vehicles this year.
In August 2018 the SEC threatened Tesla and Musk with a fraud lawsuit after it also declared on Twitter that it had secured the necessary funding to remove Tesla from the stock market and suggested that to carry out the transaction it would pay 420 dollars for action.
However, on September 29, the US Securities and Exchange Commission announced that it would not proceed with its claim after having reached an agreement with Musk for which the businessman would leave the presidency of Tesla for three years.
The agreement included, in addition to the payment of 40 million dollars, the replacement of Musk by an “independent” person, the appointment of two independent directors for its board of directors and the establishment of a new committee of independent directors plus controls and processes for supervise the communications of Musk. (EFEUSA).