SEC said Musk's Tesla tweets in violation of settlement agreement

The Securities Exchange Commision found that tweets from Tesla boss Elon Musk last spring violated the terms of a 2019 settlement agreement, according to the Wall Street Journal.

SEC officials pointed to a tweet on May 1, 2020, in which Musk said that Tesla’s stock price was "too high", prompting a more than $13bn decline in the company’s market value, according to the report.

At the time, regulators were monitoring the CEO’s use of Twitter during the pandemic but did not file a motion to compel enforcement of the settlement agreement.

Musk originally had some differences with the SEC in August 2018 after he tweeted he had “[f]unding secured” to take Tesla private at a price of $420 per share when in fact he had not, and had only held preliminary talks with Saudi Arabia to fund such a move. The agency charged him with securities fraud in September, and the two sides quickly settled.

As part of the settlement, Musk must have a person who revises the tweets about the company before he is allowed to post them. The settlement terms also required Musk to give up his role as chairman of the Tesla board, among other things.

“Tesla has abdicated the duties required of it by the court’s order,” Steven Buchholz, one of the SEC’s enforcement officials, wrote to Tesla in May 2020 in the letters the WSJ obtained. It was in response to the stock price tweet. Tesla responded that the tweet was simply Musk’s opinion.