Tesla’s CEO Elon Musk and the Securities Exchange Commission has reached to the agreement where the Former has agreed to follow the rules laid by the later on his Twitter usage. The Manhattan Federal Court filings confirm the agreement between SEC and Elon Musk over his erroneous Twitter usage. The negotiations had the parameters, which instructed Elon Musk on what he can post and what he cannot post on the social media about his company operations. In previous incidents, the company CEO used Twitter to share the internal services of the company that SEC objected and took the case to the Federal Courts.
In the Federal Court Filings, we learn that SEC has imposed restrictions on Elon Musk for posting about Tesla’s business, including its financial condition, earnings, and guidance; potential mergers or acquisitions; production numbers or sales; projections or estimate numbers and many other things. Any of the things that he wants to post about Tesla’s business need to get pre-approval from securities lawyer. Recently, Elon Musk posted something about the internal operations of the company without getting pre-approval from the securities lawyer, and that’s why the SEC took it to court. In the last hearing, the Federal Court of Manhattan instructed both the parties to mutually settle the dispute.
In February 2019, Elon Musk Tweeted about Tesla’s production target, which misled the investors according to the SEC. As the Federal court ruled in favor of SEC, Musk had to pay $20 million in fines and also perform this settlement. From now on, Elon Musk has to get pre-approval from Securities Lawyer before posting anything related to Tesla’s business. Otherwise, he will have to face serious consequences. Tesla denied sharing any views on this matter as of now. But with this decision, Tesla’s Stock was down by almost 5%.