[Followup] SEC asks federal judge to hold Elon Musk in contempt

[kuhnertdm]

Link: https://www.washingtonpost.com/business/2019/02/26/sec-asks-judge-hold-teslas-elon-musk-contempt-saying-he-violated-settlement-deal/?utm_term=.283f1e48b26c

 

Background: Last year, Elon Musk tweeted out that his auto manufacturer Tesla was willing and able to go private by buying back stock at $420 a share, while Tesla was actually not able to do so. This artificially inflated Tesla's stock price, and the SEC sued him and Tesla for fraud. A settlement was agreed upon in which neither Musk nor Tesla would admit fault, nor would they remove Musk as CEO of the company. However, they would remove him as chairman of the board (the group that can choose who the CEO is), and they would have to pay $20 million. They would also be legally required to hire a lawyer to proofread all of Musk's tweets going forward to make sure that he doesn't commit fraud again.

 

Now: Last Tuesday, Elon Musk tweeted out his production projections for Tesla: That they will make around 500k in 2019. Four and a half hours later, he tweeted a correction, stating that the 500k would actually be their annual production rate by the *end* of 2019, not that they would make 500k in 2019. Without the recent events surrounding this, this would not be a serious issue, as the correction was made quick enough to probably not cause financial damage to anyone. However, this could be considered evidence that they were not following their settlement agreement to proofread Musk's tweets.

 

And it turns out that the SEC agrees. Today, the SEC asked a federal judge to hold Musk in contempt of court for violating his settlement agreement. In short, if he breached his agreement with the SEC, then he could face even greater fines than the $20 million he already paid, or even jail time. The general idea is that Musk agreed under penalty of law to hire a lawyer to proofread his tweets before they went out, and he broke that agreement. What's more, Tesla seems to be admitting to this fact. The SEC asked Tesla whether that first tweet had been preapproved, and Tesla replied stating that, no, it was not, and the lawyer saw the tweet after it was put up without their knowledge. The lawyer then prompted Musk to tweet the correction.

 

[Author's note: Again, before anyone starts attacking me over this, the takeaway is that Musk broke his legally binding agreement, not that he slipped up.]

[Orangeator]

Damn... Elon isn't doing too hot right now. He needs to lay low for a bit here haha.

[Guest]

Tweets aren't made for long messages, of course they could end up meaning something different. IDK anyone who would take a tweet seriously, its social media not a news source. 

[TetraSky]

 

 

Elon truly suffer of Foot in Mouth syndrome. 

[DesolationGod]

musk really needs to delete his twitter account Lol

[BobVonBob]

6 hours ago, floofer said:

Tweets aren't made for long messages, of course they could end up meaning something different. IDK anyone who would take a tweet seriously, its social media not a news source. 

You need to take tweets seriously in the financial market. The faster you act on any scrap of information you can find the more money you stand to make if things go your way.

[Guest]

3 minutes ago, BobVonBob said:

You need to take tweets seriously in the financial market. The faster you act on any scrap of information you can find the more money you stand to make if things go your way.

Not really Elon's fault if some people are willing to act on a tweet like that. 

[BobVonBob]

6 hours ago, floofer said:

Not really Elon's fault if some people are willing to act on a tweet like that. 

It's not about the tweet specifically, it's about this

6 hours ago, kuhnerdm said:

tweeted out that his auto manufacturer Tesla was willing and able to go private by buying back stock at $420 a share, while Tesla was actually not able to do so

Which is very much fraud and very much illegal.

[kuhnertdm]

Yeah, in short, "Well people shouldn't fall for it" isn't a good defense against "Companies shouldn't try to con people out of their money".

[Guest]

Just now, BobVonBob said:

It's not about the tweet specifically, it's about this

Which is very much fraud and very much illegal.

Even still, if you go out and buy or sell shares as a result of a tweet, then lose money, its still your fault. Elon doesn't force you to buy or sell. You look at the market, you look at the trends, the official Tesla media, not a personal account. Blaming other people for your loss doesn't get you your money back. 

[Billy Pilgrim]

Just now, floofer said:

Even still, if you go out and buy or sell shares as a result of a tweet, then lose money, its still your fault. Elon doesn't force you to buy or sell. You look at the market, you look at the trends, the official Tesla media, not a personal account. Blaming other people for your loss doesn't get you your money back. 

He is still lying. As the CEO and Chairman of a company he represents Tesla.

[Bigbootyjudy]

*tweets dead deer*

[kuhnertdm]

8 minutes ago, Billy Pilgrim said:

He is still lying. As the CEO and Chairman of a company he represents Tesla.

Yeah, this is the big problem. The US has laws in place so that huge companies can't just say "We're growing faster than anyone else ever, invest in us and you'll make back 500%!!!" even if it's a complete lie. That's what fraud laws are. And it's not the victims' fault; they should be able to reasonably expect that, because these laws are in place, companies aren't lying to them about their finances.

[Guest]

11 minutes ago, Billy Pilgrim said:

He is still lying. As the CEO and Chairman of a company he represents Tesla.

But does his twitter represent Tesla?

[Blademaster91]

Isn't it his personal twitter? Although it still isn't his fault if a person chooses to invest based on a twitter post.

[Fnige]

Just now, Blademaster91 said:

Isn't it his personal twitter? Although it still isn't his fault if a person chooses to invest based on a twitter post.

 

3 minutes ago, floofer said:

But does his twitter represent Tesla?

Still technically fraud, fraud is illegal, illegal is bad, bad is not accepted, but just accept that this happened and he is held in contempt 

[Guest]

1 minute ago, SlimyPython said:

 

Still technically fraud, fraud is illegal, illegal is bad, bad is not accepted, but just accept that this happened and he is held in contempt 

That all depends on what the federal judge says.

[THraShArD]

If it's not 1 thing, it's another.  There always going to be some Circus side-show going on.

 

When are they flying someone around the Moon ?

[Tech Enthusiast]

Only in america can it be illegal to talk about your own company. Glad you are at least allowed to shoot people left right and center, unless there is boobs involved, then you have to shut your eyes!

 

America really feels more and more strange, the longer I follow US news the less I believe there is hope left.

[Gullerback]

dont you wish you could edit tweets =p

[Arika]

I wish people cared about the tweets calling for the death of an entire race as much as they care about what Elon tweets. 

[Drak3]

2 minutes ago, Tech Enthusiast said:

lad you are at least allowed to shoot people left right and center,

Highly illegal.

 

Killing unborn babies is fair game in some places, though, if that makes you feel better

4 minutes ago, Tech Enthusiast said:

Only in america can it be illegal to talk about your own company.

It's illegal to lie about finances and manipulate stock.

 

1 minute ago, Arika S said:

I wish people cared about the tweets calling for the death of an entire race as much as they care about what Elon tweets. 

<Insert minority here> can't be racist though.

[S w a t s o n]

imagine telling someone 10 years ago, the SEC would be taking action against someone for a tweet, and people could be legally bound to have tweets proofread, what a time to be alive

[Ithanul]

Thing is, he did not keep to the agreement with SEC about his tweets.  The settlement was that all tweets going forward are to be reviewed that state about Tesla business matters and to not state false claims about said business.  He broke the agreement; hence, the SEC is going after him again.

 

 

[suits]

I want the guy,a joy that just sits around and waits for Elon to tweet all day. #thedream