Elon Musk, the Chief Executive Officer of Tesla, has been involved in a running battle with the Securities and Exchange Commission (SEC) over the past year or so. After he had agreed to not tweet any market sensitive information and tweet anything only after having conferred with his team, the SEC believed that he had violated it once again when he tweeted out production estimates in a tweet back in February this year. The SEC brought contempt of court charges against the billionaire and at a Southern District court in New York, the judge gave the two parties two weeks within which they were to settle their differences.
The United States Judge Alison Nathan stated at the hearing that irrespective of what he says, the issue is not going to be solved and urged the two parties to show some maturity so that the unseemly affair could have a permanent solution. However, she was quick to add that contempt of court is a big offence and the letter of the law must apply equally to all, irrespective of the fact that the alleged offender is a billionaire.
The SEC has stated that Musk’s behaviour is nothing short of irresponsible and they have now come across as many as 15 tweets that could be in violation of the earlier gag order. They went on to state that his tweets could lead to chaos in the markets and that after all, is the job of the SEC to monitor. While entering the court, Musk spoke to reporters and praised the judges in America. He said, “I have great respect for the justice system, and I think the judges in the American system are outstanding.”
Musk’s legal team insisted that he had abided by the gag order and earlier, the Tesla CEO had himself stated that the tweet that he had sent out in February was not privileged information. He had said at the time that the information was publicly available. Musk has already had to step down as the Chairman of the company, and it is believed that if he is found in contempt of court, then he could also be removed as the CEO of the company he founded. The editor of the Revs Institute for Automotive Research, Paul Ingrassia said that the court had to tread carefully regarding this case. He said, “The court and SEC are in a bit of a bind here because capital punishment, if you will, would be … throwing him out of the company or banning him from running any public company from now on for violating this agreement with the SEC.”