Tesla Failed to Enforce Rules on Elon Musk’s Tweets, Says SEC

Last year, the U.S. Securities and Exchange Commission (SEC) told Tesla CEO Elon Musk that his use of Twitter had violated a court-ordered policy requiring his tweets to be preapproved by company lawyers, according to the Wall Street Journal.

The news also comes after Musk settled an enforcement in 2018, which alleged that Musk had committed fraud by tweeting information about a potential buyout of the company. Musk and Tesla each had to pay $20 million to settle the case, and Musk agreed for all future public statements to be overseen by Tesla’s lawyers.

In 2019 and 2020, however, the SEC claims that Musk did not have Tesla’s lawyers preapprove stock prices before Musk tweeted about specific solar roof production volumes. The SEC later attempted to enforce the difficult to govern and unique requests for Tesla in the case’s wake, with the agency saying Musk violated the rules in February 2019, and even recommending he be held in contempt to a local judge.

The SEC’s letter to Musk, as signed by senior SEC official Steven Buchholz, said that Tesla had failed “to enforce these procedures and controls despite repeated violations by Mr. Musk.” The letter added, “Tesla has abdicated the duties required of it by the court’s order.”

Musk is also being sued by an individual investor in Delaware who is claiming that Musk broke SEC rules, and he has taunted the U.S. agency multiple times in the past few years.