The U.S. Securities and Exchange Commission (SEC) is after Elon Musk yet again. This time, the regulator ordered Musk to be held in contempt for violating a previous judgment related to his penchant to tweet info that infringes on the securities rules.
The SEC filed a contempt order against Musk, in which it specifically noted that he violated a fraud settlement by posting to Twitter in regard to material information without preapproval. The news resulted in Tesla’s stock spiraling, declining as much as 5 percent during extended trading Monday.
Musk tweeted on February 19:
In the SEC filing, it focused on these tweets, stating that “Musk did not seek or receive pre-approval prior to publishing this tweet, which was inaccurate and disseminated to over 24 million people. Musk has thus violated the Court’s Final Judgment by engaging in the very conduct that the pre-approval provision of the Final Judgment was designed to prevent.”
Prior to this, the SEC filed a complaint against Musk in September 2018, alleging that he “published a series of false and misleading statements to millions of people, including members of the press, using the social media platform Twitter.”
It discovered that Musk’s “misleading tweets” had caused Tesla’s stock price to increase by more than 6 percent on August 7, 2018. CCN reports that around the same time, Musk tweeted that “he could take Tesla private at $420 per share.” This misleading tweet caused Tesla’s stock price to jump on that date, according to the SEC.
Musk was required to pay a $20 million fine as part of the settlement, in addition to him being stripped of his chairman title. He was also required to seek approval from an overseer that must review anything he posts to social media.
Musk had a few words to share during an interview with the television show “60 Minutes,” in which he stated, “I want to be clear. I do not respect the SEC.” When it came to his chairman role, he said he’d prefer “to have no titles at all.”
Regarding his tweet, Musk stated: The only tweets that would have to be, say, ‘reviewed’ would be if a tweet had a probability of causing a movement in the stock [price]. Otherwise, it’s, ‘hello, first amendment.’ Like, freedom of speech is fundamental.”