The U.S. Securities and Exchange Commission told Tesla Inc TSLA last year that it had failed to oversee CEO Elon Musk’s social media posts on Twitter, in violation of a court-ordered policy, the Wall Street Journal reported on Tuesday.
See also: How to Invest in Tesla Stock
What Happened: Musk flouted the court-mandated policy when he tweeted about Tesla's solar roof production volumes and its stock price, which were not pre-approved by the electric vehicle maker’s lawyers, the report noted — citing SEC records.
Tesla stock price is too high imo
— Elon Musk (@elonmusk) May 1, 2020
According to the WSJ report, Musk’s tweets fell under a requirement for company lawyers to vet any public messages from Musk that addressed “production numbers or sales or delivery numbers,” the SEC wrote in an August 2019 letter to Tesla.
In May 2020, the regulator told Tesla that the company had failed to enforce these procedures and controls despite repeated violations.
Why It Matters: Musk is required to get certain messages pre-approved with the company lawyers before making them public as part of a settlement with the U.S. watchdog struck in the aftermath of the executive's infamous "am considering taking Tesla private" 2018 tweet.
Musk had paid a $20 million settlement to the SEC at the time and Tesla paid another $20 million.
Price Action: Tesla shares closed 0.21% at $623.90 on Tuesday and were further down 0.35% in extended hours.
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