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Why is Elon Musk being warned by the SEC about his tweets?

Federal regulators have once again warned Elon Musk to exercise caution in his tweets about Tesla.

The Securities and Exchange Commission filed papers in federal court in Manhattan on Tuesday, noting that the Tesla CEO was bound by a 2018 agreement to obtain permission in advance if he wanted to tweet certain posts.

The SEC also denied Musk’s “substantially meritless” motion to quash a subpoena for records relating to his Twitter poll last November on whether to sell some of his Tesla stock.

Musk’s lawyer did not immediately respond to a request for comment.

According to Tesla, the SEC requested “information on our governance processes around compliance” in November, following a September 2018 settlement between the company and the regulatory agency.

The subpoena was issued just 10 days after Musk sparked a stock market sell-off by asking his Twitter followers if he should sell 10% of his stake in the company.

During the two days of trading that followed the tweet, Tesla’s stock price fell by 16 percent.

Earlier this year, The Washington Post exclusively revealed that Musk insisted his tweet about a Tesla buyout in 2018 was “completely true.”

Musk laid out his version of events leading up to his Aug. 7, 2018, tweet that sparked a social media firestorm — and a rap on the knuckles from federal regulators — in a filing in the US District Court for the Northern District of California.

SEC regulators fined Musk and his company for tweets about the company’s future.
“I’m thinking about taking Tesla private at $420.” That day, Musk tweeted, “Funding secured.”

Tesla is being sued in federal court by shareholders who claim Musk’s tweet caused them to lose billions of dollars. Both the SEC and Tesla declined to comment. Tesla stock was trading slightly lower than its opening price on Monday morning.

The number “420” is code for marijuana use. Musk agreed to step down as chairman and appoint independent members to Tesla’s board of directors as part of the settlement between Tesla and the SEC.

He also agreed to pay $20 million in fines, with the company contributing another $20 million. According to the SEC, Musk agreed to “establish a new committee of independent directors and put additional controls and procedures in place to oversee [his] communications.”

Musk’s Twitter habit, on the other hand, nearly landed him in hot water with the SEC once more. The following year, the agency asked a judge to hold Musk in contempt for tweeting about Tesla’s production forecast without permission.

Musk and the SEC then agreed to amend their previous settlement by including topics that the CEO is not permitted to tweet about.

Elon Musk has been warned yet again by federal regulators to be cautious in his tweets about Tesla, according to Post wires.

The Securities and Exchange Commission filed papers in federal court in Manhattan on Tuesday, noting that the Tesla CEO was bound by a 2018 agreement to obtain permission in advance if he wanted to tweet certain posts.

The SEC also denied Musk’s “substantially meritless” motion to quash a subpoena for records relating to his Twitter poll last November on whether to sell some of his Tesla stock.

Musk’s lawyer did not immediately respond to a request for comment.

According to Tesla, the SEC requested “information on our governance processes around compliance” in November, following a September 2018 settlement between the company and the regulatory agency.

The subpoena was issued just 10 days after Musk sparked a stock market sell-off by asking his Twitter followers if he should sell 10% of his stake in the company.

During the two days of trading that followed the tweet, Tesla’s stock price fell by 16 percent.

Earlier this year, The Washington Post exclusively revealed that Musk insisted his tweet about a Tesla buyout in 2018 was “completely true.”

Musk laid out his version of events leading up to his Aug. 7, 2018, tweet that sparked a social media firestorm — and a rap on the knuckles from federal regulators — in a filing in the US District Court for the Northern District of California.

SEC regulators fined Musk and his company for tweets about the company’s future.

“I’m thinking about taking Tesla private at $420.” That day, Musk tweeted, “Funding secured.”

Tesla is being sued in federal court by shareholders who claim Musk’s tweet caused them to lose billions of dollars. Both the SEC and Tesla declined to comment. Tesla stock was trading slightly lower than its opening price on Monday morning.

The number “420” is code for marijuana use. Musk agreed to step down as chairman and appoint independent members to Tesla’s board of directors as part of the settlement between Tesla and the SEC.

He also agreed to pay $20 million in fines, with the company contributing another $20 million. According to the SEC, Musk agreed to “establish a new committee of independent directors and put additional controls and procedures in place to oversee [his] communications.”

Musk’s Twitter habit, on the other hand, nearly landed him in hot water with the SEC once more. The following year, the agency asked a judge to hold Musk in contempt for tweeting about Tesla’s production forecast without permission.

Musk and the SEC then agreed to amend their previous settlement by including topics that the CEO is not permitted to tweet about.

About the author

Akanksha Jain

Akanksha Jain love to learn new stuff every day. With a background in computer science and a passion for writing, she loves writing for Startup, Business sections of Editorials99.

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