Elon Musk and USA securities regulators have settled their dispute over the Tesla CEO's tweets, with Musk agreeing to having his future communications regarding the electric-car maker pre-approval by a company-employed expert.
The SEC asked U.S. District Judge Alison Nathan to hold Musk in contempt, alleging a February 19 tweet from Musk - which claimed Tesla would deliver half a million vehicles this year - violated the terms of an earlier securities fraud agreement that required Musk's tweets concerning company news to be pre-approved by the agency.
The deal has yet to be approved by the judge overseeing the case, Judge Alison Nathan, but given that earlier this month she instructed both sides to "put [their] reasonableness trousers on" and reach a settlement, there doesn't appear to be any reason why the settlement wouldn't be approved.
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SEC officials had originally argued Musk should be held in contempt of court for allegedly violating an earlier settlement on tweeting potentially market-sensitive information without having it reviewed by counsel.
Among the list, Musk must first get securities lawyer approval for written communication about Tesla's financial condition, proposed mergers, production numbers or sales, court documents show.
In addition to RHD order pages for the Model 3 going live, Tesla has also extended its current referral program from 1,500km of free Supercharging for anyone using a referral code when purchasing any Tesla auto to 7,500km. The SEC had asserted that Musk never sought clearance for any tweet. While the SEC expected Musk to begin regularly clearing tweets with lawyers, Musk interpreted this language as giving him significant discretion to decide for himself which tweets contained material information. Their plight and eventual rescue by a team of volunteers from many countries was one of the world's biggest news stories previous year. The new agreement provides much more detailed guidance about when tweets and other public statements by Musk must be approved by Tesla lawyers. The SEC said that the tweet violated federal securities laws and eventually the two parties settled.
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"When someone is in contempt of the agency in this manner, they need to react firmly and severely to retain their credibility with others who are accused of violating" agreements, he said. Earlier this week, the electric vehicle maker posted a $702 million loss, and warned of a loss in the second quarter. It follows an October agreement that required him to step down as chairman and pay $20 million (Dh73m) to settle charges that he defrauded investors with false claims on Twitter in August about a possible bid to take the company private, which was quickly abandoned.
TSLA is up 1.1% after hours.
Overall company revenue in the period rose 33 percent to $4.5 billion in a year-over-year comparison, but fell far short of Wall Street forecasts.
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