The SEC has reportedly stated that Tesla CEO Elon Musk’s contempt of court defense “borders on ridiculous.”
Business Insider reports that the SEC is not impressed by Tesla CEO Elon Musk’s defense of the U.S. regulator’s charges of contempt of court, stating that Musk’s defense “borders on ridiculous.” The SEC believes that Musk’s tweet stating that Tesla would produce 500,000 vehicles in 2019 was a “blatant violation” of a court order that required that Musk’s tweets be vetted before posting.
The SEC claims that Musk failed to have his tweets vetted and instead “unilaterally” decided what constitutes material information, a move the government called “stunning.” In a filing on Monday, the SEC stated: “The preapproval requirement was designed to protect against reckless conduct by Musk going forward. It is therefore stunning to learn that, at the time of filing of the instant motion, Musk had not sought pre-approval for a single one of the numerous tweets about Tesla he published in the months since the Court-ordered pre-approval policy went into effect.”
The filing continues to state: “Musk’s shifting justifications suggest that there was never any good faith effort to comply with the Court’s order and the Tesla Policy. Rather, Musk has simply elected to ignore them.”
News organization Reuters consulted with legal experts who stated that the SEC still has multiple avenues in which they can pursue Musk, such as: “a higher fine, imposing further restrictions on Musk’s activities or removing him from Tesla’s board or helm.”
Over the past 12 months, Tesla’s shares have dropped by around 15 percent; this coincides with the company’s repayment of a $920 million debt bond, legal issues with the SEC, worries surrounding vehicle demand, mass employee layoffs, and the announcement of the closing of multiple Tesla store locations. Tesla shares have dropped by approximately 3 percent since the announcement of the Model Y, according to MarketWatch. Garrett Nelson, an analyst at CFRA, commented on the popularity of the SUV market stating that “the key question is whether consumers will want to buy this vehicle over others in an increasingly crowded segment, particularly given the absence of incentives.”
Nelson continued to state: “The other concern is that the Model Y will likely hit the market around the same time as numerous 2021-model-year electric vehicles that various competitors have in the pipeline.” Analysts for Goldman Sachs stated that the Model Y’s unveiling could boost “incremental reservations” given the larger global market for crossover vehicles compared to sedans.
Breitbart News will continue to follow this case and all Tesla news closely.