Elon Musk has attacked America's financial regulator, saying that its oversight is "broken", after the organisation claimed that the Tesla chief executive had breached the rules of an agreement it reached past year. In a February 22 response to the SEC, company attorneys said, "Tesla and Mr. Musk are cognizant of the applicable policies and procedures mandated by the final judgments". "I do not have respect for the SEC", he said.
Elon Tusk memes were already popular on sites like Reddit, where members of the fandom Musk has amassed were already coming up with their own pun versions of his name.
The SEC noted that he did not ask for or receive company approval before publishing his tweet. He also posted a photo of cars to be exported to Europe.
The commission says the tweets break a promise Musk made past year to have his public statements vetted by Tesla's board. Hours later, Musk sent a follow-up tweet correcting the earlier post, disclosing the company will actually deliver just 400,000 cars this year.
The first tweet had not been preapproved as required, the SEC said in a motion filed in New York's US.Southern District Court. That assertion caused Tesla shares to shoot up but proved false and made investors betting against the company lose millions. "The SEC has authority to suspend an officer from serving in any public corporation". The securities regulator has pushed contempt orders before.
While US law could see the SEC chase another cash settlement, it could legally seek to reopen Musk's original fraud settlement, even reinstating the original fraud charges.
In that 2017 case, the SEC won a contempt ruling against investment manager Anvil Partners.
Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. She'll decide if Musk disobeyed the judgment and if he should be punished further.
Last September, Elon Musk reached a $20 million settlement with the SEC, which had accused him of lying to investors when he tweeted that he had "funding secured" to take Tesla private. "The problem is not with this one, but if there's ever strike three". "My guess is the judge is not going to throw the book at him, but she's certainly going to throw a lot of heavy words at him". "If you keep ignoring a judicial order, the SEC may drop the hammer".
Musk agreed to step down as Tesla's chairman, and both he and Tesla agreed to pay $20 million civil fines.
Although it's up to the judge, jail time for civil contempt isn't likely, but Musk could be fined again, the experts said.
On Tuesday, Musk again lashed out at the SEC following its latest filing.
Tesla had about $3.7 billion of cash and equivalents as of December 31, more than enough to make the principal payment plus another $1.15 million in interest.
Tesla did not immediately respond to request for comment. She hasn't yet set a hearing in the matter.