US regulator asks judge to hold Elon Musk in contempt over deal

The US Securities and Exchange Commission has requested that Tesla boss Elon Musk be held in contempt for violating a deal with the regulator as he once again tweeted false information about the company.

Musk tweeted on 19 February that "Tesla made 0 cars in 2011, but will make around 500k in 2019." Hours later, Musk corrected his mistake and sent a follow-up tweet indicating that the company will actually deliver just 400,000 cars this year.

According to court papers filed by the SEC on Monday, Musk "once again published inaccurate and material information about Tesla to his over 24m Twitter followers,” which were in violation of last year's agreement with the agency.

A US judge in October last year approved a settlement between the federal regulator, Tesla and Musk, over his tweets promising to take the company private which turned out to be false and affected Tesla’s stock price unnecessarily.

This time the SEC noted that Musk did not ask for permission from the company to tweet and did so without its approval.

Musk responded to the filing on Monday night by saying on Twitter that the SEC "forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing..."

Nevertheless, the October settlement stipulates that any edits to pre-approved language need to be run through Tesla’s committee and still need to be approved. The SEC also said the language Musk tweeted had not been pre-approved in the first place.

In Tesla’s response to the filing, the company said the clarifying tweet had been written by Musk and Tesla’s securities lawyer.

RBC Capital Markets said on the filing that "given that the SEC arguably let Musk off lightly for his first settlement, and given that he has taunted the SEC during which he stated that he didn't respect the SEC, we believe the SEC will seek a harsher penalty/settlement."

RBC also added that it is likely the issue will be "an overhang on Tesla stock". Shares of Tesla fell about 5% in extended trading.

LIVING ON THE MOON?

Also on Monday, Elon Musk announced in an interview to Popular Mechanics that his company SpaceX was in early stages of manufacturing a new rocked called Starship that could enable humans to create a base on the moon and sustain a presence there.

The Starship rocket will be able to transport as many as 100 humans as well as cargo to Mars, but Musk believes that it may be useful to aim for the moon too.

“We’ll probably have a base on the moon before going to Mars,” Musk said.

NASA administrator Jim Bridenstine told CNBC earlier this month that it is likely that humans will return to the moon and will aim for this to happen in 2024. The government is likely to partner with private companies to do so and SpaceX would be a strong contender to join with.