Tesla share price up 2% after court rules in dispute with SEC
A judge rules that the Tesla founder and the SEC have to reach an agreement in a battle over tweets.
Tesla share price is up after a court appearance by the car company’s founder, Elon Musk. A judge recently ordered that Musk and the Securities Exchange Commission (SEC) must reach a new agreement in its settlements about Musk’s tweets about his company’s production numbers.
Why was Elon Musk in court?
Musk was in court to settle a dispute with the SEC over his tweets. The agency said he should be held in contempt for violating an earlier agreement he made with the agency after he incorrectly tweeted in autumn 2018 about taking the company private. The agency said he ignored an arrangement they reached with Musk in which he agreed to tweet with input from other executives when he incorrectly tweeted in 2019 about how many cars the company had in production.
Musk denied the accusation that he used Twitter without consulting Tesla staff and said he corrected his erroneous message. He also said the agency was violating his First Amendment right to express himself on Twitter.
SEC comments about Musk
During a court hearing about the settlement, Cheryl Crumpton, SEC representative, said that Tesla never intended to enforce the agreement Musk made with the government agency.
‘Tesla still appears to be unwilling to exercise any meaningful control over the conduct of its CEO,’ said Crumpton.
Crumpton also recommended Musk pay fines for violation of the agreement.
Musk’s response to SEC
Musk’s attorney, John Hueston, said that he honored the agreement with the SEC.
‘We think it's very clear that Mr. Musk retained discretion in the policy,’ said Hueston.
‘He actually does what he is told,’ added Musk’s lawyer.
Judge’s ruling about Tesla and SEC dispute
US District Judge, Alison J. Nathan, urged the two sides to come to an agreement within two weeks. She said if an agreement is not reached, she’ll decide whether or not to grant the SEC’s request to fine Musk for his tweets.
‘Everybody take a deep breath, put your reasonableness pants on and work this out,’ said Nathan.
Musk expressed relief with the decision in a statement.
‘I have great respect for Judge Nathan, and I’m pleased with her decision today,’ said Musk.
Tesla shareholders and legal experts will revisit the Tesla-SEC standoff later this month to see if the two sides can settle their disagreement.
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