‘Somebody grab his phone’: Elon Musk’s gone and done it again
Tesla chief in trouble again after ignoring a court-ordered tweeting ban - and he might just go to jail this time
Elon Musk could face a possible a jail sentence after an American regulator asked a judge to hold him in contempt for ignoring an order banning him from tweeting market-moving information about the company.
The Tesla boss could also face fines for the tweet sent on February 19 which said the electric car company would make half a million cars in 2019.
The Securities and Exchange Commission claims that not only was the tweet inaccurate, but it did not receive approval from board members, a condition of a recent settlement for market manipulation. The tweet – which read: “Tesla made 0 cars in 2011, but will make around 500k in 2019” – was followed four hours later with another: “Meant to say annualised production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.”
“I hope they take away his phone,” Ross Gerber, the chief executive of fund manager Gerber Kawasaki, told Bloomberg. “It feels like the SEC cares more about doing right by Tesla than Elon does ... I am all for the bad-boy attitude, in theory, but this is still a business and he’s costing his company and shareholders a lot of money.”
Musk provoked the US Securities and Exchange Commission less than two hours after the agency asked a judge to hold him in contempt for violating the terms of a settlement reached in 2018. The Tesla chief executive wrote that the regulator overlooked a comment he made on the company’s January 30 earnings call that Tesla may sell as many as 500,000 Model 3 sedans in 2019.
The watchdog first filed a complaint in August 2018 after Musk told his then 22 million followers that he would be taking Tesla private at $420 per share, that funding had been secured, and the only uncertainty was a shareholder vote. Musk’s August tweet caused Tesla’s stock price to soar by 6% within 24 hours of it appearing online. The SEC argued that Musk had not discussed any deal terms with financing partners and that he had played with the markets by using false information.
As part of a settlement with the regulator Musk agreed to give up his role as chairman of the board and to seek approval for any social media or written communications that contained information relevant to Tesla or shareholders. He also paid a $20m fine. Musk has since continued his bitter feud with the SEC, suggesting in December that nobody would be vetting his social media in an interview with CBS’ 60 Minutes, in which he said he “did not respect the SEC”. He has also criticised the organisation on Twitter, describing them as “the Shortseller Enrichment Commission”.
Anyone found in contempt of court in either criminal and civil proceedings can face prison time or significant fines.