SEC Subpoenas Tesla Over Elon Musk Tweet Yet Again

Tesla Inc TSLA has once again come under regulatory scrutiny in relation to one of CEO Elon Musk's tweets.

A 10-K Filing with the U.S. Securities and Exchange Commission shows the company has been subpoenaed in regard to a 2018 tweet in which Musk talked about taking the company private, but the timing suggests the probe may have been spurred by a more recent tweet from the Tesla CEO.

What Happened: Initially reported by Bloomberg, Tesla has received another subpoena from the SEC about the same recurring subject: Musk's use of his personal Twitter account.

The SEC issued the subpoena on Nov. 16, seeking information on Tesla's "governance processes around compliance" with the agency in relation to a previously settled probe as Tesla highlights in the filing. 

"The SEC had issued subpoenas to Tesla in connection with Elon Musk’s prior statement that he was considering taking Tesla private," Tesla said in the SEC filing. "The take-private investigation was resolved and closed with a settlement entered into with the SEC in September 2018 and as further clarified in April 2019 in an amendment."

As part of the settlement, a company lawyer was designated to pre-approve Musk’s tweets about specific subjects including anything related to Tesla’s sales or delivery numbers. That didn't do much to deter Musk from his use of the social media platform. 

Early in 2019, the SEC sought to have Musk held in contempt when he tweeted about Tesla's production outlook without getting approval in advance. The two sides agreed to amend their settlement later that year as mentioned by Tesla in the filing. 

Why It Matters: This most recent subpoena was issued 10 days after Musk posted a poll on Twitter asking people to vote whether or not he should sell 10% of his Tesla stake.

Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.

Do you support this?

— Elon Musk (@elonmusk) November 6, 2021

Musk reportedly needed to sell Tesla shares because he was facing a tax bill of more than $15 billion on stock options.

"I will abide by the results of this poll, whichever way it goes," Musk said in a follow-up tweet. 

Tesla shares plunged more than 15% over the next two trading days. 

See Also: Elon Musk Says Twitter Poll Had No Impact On Tesla Stock Sale

A Tesla shareholder filed a lawsuit against the company, arguing that Musk's behavior on social media negatively impacted the price of the stock.

Tesla didn't elaborate about what prompted the subpoena from the SEC, but the timing of the probe suggests that it could be related to Musk's Twitter poll.

TSLA Price Action: Tesla has traded as low as $539.49 and as high as $1,243.49 over a 52-week period.

The stock was down 0.82% at $915.78 Monday afternoon. 

Photo: courtesy of Tesla.