SEC asks judge to hold Tesla’s Musk in contempt of violating deal

February 25, 2019

(Reuters) – The U.S. Securities and Exchange Commission on Monday asked a judge to hold Tesla Inc’s Chief Executive Officer Elon Musk in contempt for violating last year’s settlement with the federal agency, sending shares of the electric carmaker down 5 percent in extended trade.

The regulator pointed to Musk’s Feb.19 tweet: “Tesla made 0 cars in 2011, but will make around 500k in 2019,” noting that Musk did not seek or receive pre-approval prior to publishing this tweet, which was inaccurate and disseminated to over 24 million people.

Musk thus violated last year’s settlement by engaging in the very conduct that the preapproval provision of the final judgment was designed to prevent, according to the regulator.

A U.S. judge in October approved the settlement between the federal regulator, Tesla and Musk, over his tweets promising to take the company private.

Tesla did not immediately respond to a request for comment.

(Reporting by Akanksha Rana and Ankur Banerjee in Bengaluru; Editing by Sriraj Kalluvila)

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