The motion asks the judge to issue an order that would put the onus on Musk to show why he should not be held in contempt for violating the settlement.
Tesla did not immediately respond to a request for comment.
Tesla and Musk agreed in September to pay $US20 million ($28 million) each to the SEC, and the billionaire stepped down as the company’s chairman but remained as chief executive. In the settlement, the agency pulled back from its original demand that Musk, who is synonymous with the Tesla brand, be barred from running Tesla, a sanction many investors said would be disastrous.
The settlement was approved by a US judge in October, who can now decide whether its terms have been violated.
In a response to the SEC’s demand for information regarding the February 19 tweet, a lawyer for Tesla and Musk said the CEO’s tweet was meant to reiterate information already approved, then disseminated when the company released fourth-quarter earnings results in January.
Although the tweet was not pre-approved, the lawyer wrote, Musk believed its substance had been “appropriately vetted, pre-approved and publicly disseminated”. Moreover, the lawyer said, the statement was made outside of market trading hours.
It was not immediately clear what the repercussions would be were Musk to be found in contempt, as such a citation does not necessarily mean the original agreement is now null and void.
The SEC could seek a so-called bar order, removing him from Tesla’s board, or could ask for a lesser penalty, like a monetary fine, said Stephen Diamond, a professor of corporate governance at Santa Clara University.
The SEC could also ask the court to reopen the original settlement for renegotiation, he said, perhaps asking that the original charges be reinstated.
“It’s a pretty unusual situation,” Diamond said, adding that “all bets are off.”
Reuters
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