Last spring, the U.S. Securities and Exchange Commission admonished Tesla and CEO Elon Musk for allegedly violating the terms of a revised 2019 resolution agreement, according to correspondence obtained and first reported by the Wall. Street Journal.
SEC officials pointed to a tweet on May 1, 2020, in which Musk said that Tesla’s stock price was “too high,” causing a more than $ 13 billion decline in the value of the company’s market, according to the report. The SEC also pointed to Musk’s tweets from 2019, where he discussed solar roof production figures without getting prior approvals, the Journal said.
While securities regulators monitored Musk’s use of Twitter amid the pandemic and confronted him and Tesla by correspondence, they did not file a motion to force enforcement of the deal.
Musk must have Tesla-related tweets containing material information from the company approved by a lawyer before posting them. A so-called “Twitter babysitter” was part of a revised settlement agreement reached between the SEC, Musk and Tesla. The terms of the deal also required Musk to step down as chairman of the Tesla board, among other things.
Securities regulators originally filed two separate complaints, one against Musk personally and one against Tesla, accusing them of committing securities fraud in 2018, after the CEO tweeted that he would take the company privately at $ 420 a share and had “financing ”. insured “for the deal.
The infamous tweet on August 7, 2018 sent Tesla shares skyrocketing and caused a period of volatility for the company and Musk. In the 16 months that followed, Tesla shares hit a three-year low of around $ 177 a share before skyrocketing again and surpassed $ 420 in December 2019.
Shares of Tesla closed Tuesday at $ 623.90 and fell slightly after hours.
Shareholder lawsuits against Tesla and Musk, including the Gharrity v Musk et al case, have also targeted the CEO’s Tweets and said they caused financial damage to shareholders and the company.
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