Elon Musk ordered to work things out with the SEC over his tweets

Elon Musk sat stoically in a courtroom in Manhattan on Thursday, hands clasped in front of him, while a federal judge considered whether he held him in contempt. The next cause was a tweet that Musk sent in February and that the Securities and Exchange Commission says it violated the terms of its agreement. And when the judge finally punished the decision, ordering his lawyers and the SEC to settle their differences and return in two weeks with a resolution, he seemed relieved.

"Take a breath," said US District Court Judge Alison Nathan. "Come back with your reasonable pants on."

When I left the courtroom, I asked Musk what he thought about the judge's call for action. Nathan is "an excellent judge," Musk said quietly. Then, again, before climbing into a small elevator, he said: "I am very impressed with Judge Nathan's analysis."

The hearing was the result of a presentation on February 25, when the SEC asked a federal judge to hold The CEO of Tesla in contempt. The agency claimed that a Feb. 19 tweet from Musk violated the language in a previous agreement between the SEC and Musk. In the tweet, Musk said that Tesla would manufacture "around 500k" in 2018, which according to the SEC contradicted the official guidance of the company presented on January 30. Musk even issued a correction hours later, which the SEC later determined because Tesla's attorney in charge of monitoring Musk's tweets considered that it should be modified.

The SEC argued that Musk was supposed to have his public communications on Tesla-tweets included: pre-approved by an internal lawyer appointed as part of the conciliation agreement signed last September. Musk denies that the prior approval was part of that agreement, which was reached after the agency sued Musk for securities fraud for the tweets he sent in August about Tesla's confidentiality. Musk said at the time that he had "secured funds" to carry out the move, but the SEC determined that was false. As a result, Musk was forced to retire as president of Tesla and had to pay a fine of $ 20 million.

Since the February contempt request, Musk and the SEC have participated exclusively in court documents. Musk's lawyers characterized the SEC's interpretation of the agreement as an "unconstitutional takeover," and that the attempt to disregard it is "virtually wrong at all levels." The SEC responded that Musk was in "flagrant violation" of the September Settlement.

. Today was the first time that the two parties appeared in a court to present their arguments to a judge. The result was two hours of semantic debate, with Judge Nathan, the SEC and Musk's legal team discussing the language in the agreement. The SEC accused Musk of "recklessly tweeting information without any basis," of not taking into account the language of the agreement and then trusting in "changing the justifications" to explain his actions. The Musk team responded that the agreement was drafted ambiguously, and anyway their tweets were irrelevant and did not require prior approval.

"This is an unusual case," Judge Nathan said at the hearing, to which SEC attorney Cheryl Crumpton agreed, " is an unusual case."

Towards the end, however, Judge Nathan was not willing to make a decision on the contempt charge. "I'm going to admit surprise," she said. "For me, this scream works."

And that's what the SEC and Musk should do now, since Judge Nathan has given both parties two weeks to come to a conclusion. If there is no resolution, the judge said: "You will hear from me."

And there may be more problems for Musk. During the hearing, Crumpton said that the SEC considers that Tesla's role in monitoring Musk's social media activity is "very worrying," and that the agency "is still evaluating" whether it should take any action against the company. of electric cars too.

When he left the courthouse, a reporter asked Musk if he would continue tweeting, a possibly frivolous activity that has caused him so much consternation, in addition to tens of millions of dollars in fines. Why keep doing it? Why not stop?

He looked over his shoulder, smiled and winked.

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