SEC subpoenas Tesla over Musk tweet settlement

Deepak Gupta February 8, 2022
Updated 2022/02/08 at 5:42 PM

Tesla received a subpoena from the Securities and Exchange Commission in November 2021, according to Reuters and CNBC. The automaker revealed the information in a financial file, noting that the agency, in particular, is seeking information on its “governance processes around compliance with the SEC settlement, as amended.” The November subpoena was issued shortly after company boss Elon Musk asked his Twitter followers if he should sell 10% of his Tesla stake. the automaker stocks fell sharply following this tweet.

Tesla has been at loggerheads with the SEC for years, starting in 2018 when the agency sued Elon Musk for tweeting that the company is going private. The agency said Musk’s tweeting that Tesla had already secured funding to take the company private constitutes fraud as it was a “false and misleading” statement.

When Tesla settled with the SEC that year, Musk had to agree to have his social media posts containing material information pre-approved by a legal team. Shortly after that, though, he tweeted previously undisclosed production numbers for 2019 without reviewing that information first. The SEC tried to detain him for flouting the 2018 settlement, and they had to make changes so Musk knew exactly what he can and can’t tweet.

The Tesla boss is known to be a frequent user of Twitter. Amid random memes and tweets, he uses the platform to share updates and new announcements about his companies, including Tesla and SpaceX. A group of Tesla investors filed a lawsuit in 2019 in an attempt to stop their “uncontrolled” use of the platform. And just last year, another investor sued Musk and the company, accusing them of violating the SEC settlement. The author argued that Musk continues to tweet “erratic” and unapproved posts, including one in May 2020 in which he said Tesla’s stock price was “too high.” Musk took of several break of Twitter over the years, and once even claimed that he deleted his account but he is still very active on the platform at the moment.

All products recommended by Ploonge are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

Share this Article
Leave a comment

Leave a Reply

Your email address will not be published.