While he challenged Russian President Vladimir Putin to a fight on Twitter, Tesla (Nasdaq: TSLA) CEO Elon Musk’s own Twitter account is the primary subject of his ongoing battle with the US Securities and Exchange Commission.
The SEC filed with the US District Court, Southern District of New York a reply pertaining to Musk’s attempt to throw out the 2018 consent decree agreement with the regulatory body on his tweets.
“So long as Musk and Tesla use Musk’s Twitter account to disclose information to investors, the SEC may legitimately investigate matters relating to Tesla’s disclosure controls and procedures, including Musk’s tweets about Tesla, as well as the accuracy of Tesla’s public statements about its controls and procedures,” the SEC said in the court filing.
This means the SEC is claiming that even if the 2018 agreement is thrown out, the agency can still include Musk’s tweets under its investigation if they relate to Tesla’s disclosures and procedures.
The court proceeding marred Musk’s celebratory event at the Giga Berlin factory, as the automaker delivered its first Model Y vehicles to customers in Germany.
In a 33-page court filing submitted on March 8, Musk is asking the Manhattan federal court to quash the subpoena issued by the SEC pertaining to the review or pre-approval of his tweets, as well as requesting the court to terminate altogether the 2018 agreement.
“Mr. Musk felt ‘forced to sign the consent decree in 2018 [when] Tesla was a less mature company and the SEC’s action stood to jeopardize the company’s financing. Defending against the SEC’s action through protracted litigation was not in the interests of the company and its shareholders,'” said Musk’s lawyer Alex Spiro in the filing.
The long-storied animosity between the Tesla CEO and the regulatory body stemmed from the charge filed by the commission against Musk for “false and misleading” remarks to shareholders. This pertains to Musk’s tweet announcing he has enough funds to take the firm private as it was trading at US$420 per share, sending the company’s stock to a period of substantial volatility.
Last month, Spiro wrote to the court in which he accused the commission of leaking sensitive information. A few days after, the SEC has reportedly been investigating Musk and his brother, Tesla director Kimbal Musk, for alleged insider trading.
The latest development in the court battle between Musk and the SEC is leading followers of the story to their own conclusions.
Tesla last traded at US$993.98 on Nasdaq, its highest close since January 2022.
Information for this briefing was found via CNBC, The Verge, Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.