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Bloomberg
Elon Musk is facing a new round of regulatory trouble for tweets about Tesla Inc., raising fresh concerns about the billionaire CEO’s ability to keep his impulses in check and responsibly run a public company.
The US Securities and Exchange Commission asked a judge to hold Musk in contempt for violating a settlement that required him to get Tesla approval for social media posts and other writings that could be material to investors.
He breached that deal with a February 19 tweet that said Tesla would make about half a million cars in 2019, the agency claims. The CEO posted a few hours later that deliveries would only reach about 400,000.
The SEC move, which sent Tesla shares down 3 percent in pre-market trading, puts Musk in fresh legal peril less than five months after he settled claims that he misled the public with tweets about taking the electric-car maker private.
He could face a variety of penalties, with the stiffest being that he’ll be barred from running Tesla or any other public company for a period of time, said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.
“Having your CEO in contempt of an SEC action is a pretty bad thing,†Elson said in a phone interview. “They settled with him and within a few months he’s back to doing similar things. It’s unbelievable.†Calls to Tesla and emails to Musk and his representative weren’t immediately returned.