SEC calls Musk's first amendment tweet defense 'ridiculous'

SEC says Musk defense 'borders on the ridiculous'

Not only was Musk's "around 500k" tweet not approved by Tesla's lawyers, but the SEC discovered that "Musk had not sought pre-approval for a single one of the numerous tweets about Tesla he published in the months since the court-ordered pre-approval policy went into effect", the agency wrote on Monday.

Musk's lawyers wrote last week that the February 19 tweet merely restated previously approved disclosures on electric vehicle production.

Going forward, new updates on Musk's ongoing legal battle with the SEC might keep Tesla investors on their toes.

In the document, the SEC called it "frankly hard to follow Musk's tortured analysis" arguing that he did not need to seek pre-clearance on Tesla tweets from company staff. When Musk last debuted a vehicle for the mass market - the Model 3 sedan - Tesla took $1,000 reservations from consumers. According to the settlement between Tesla and the regulatory body, the company was required to "establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk's communications".

On Monday, SEC lawyers responded by calling his continued defiance of the agreement "stunning".

Also Monday, Musk lawyer, former Enron prosecutor John C. Hueston of Newport Beach, California, asked the court for permission to file another response to the SEC, this one by Friday.

He also said it was posted after the markets had closed and did not impact on trading. "Musk's contention-that the potential size of a vehicle company's production for the year could not reasonably be material-borders on the ridiculous", the agency wrote.

More news: Former Jaguars QB Blake Bortles to sign with Rams as backup

Musk's lawyer said that there was no "clear and convincing evidence" to prove the violation of the settlement.

Tesla immediately began charging $2,500 to order a Model Y, which won't be available for at least a year and a half.

Musk's 13-word February 19 tweet said that Tesla would produce around 500,000 vehicles this year, but it wasn't approved by the company's "disclosure counsel", the SEC has said.

Legal experts have said the SEC could pursue multiple avenues, including a higher fine, imposing further restrictions on Musk's activities or removing him from Tesla's board or helm.

"As long as a statement submitted for pre-approval is not false or misleading, Tesla would presumably approve its publication without any restraint on Musk".

The case is U.S. Securities and Exchange Commission v. Musk, 18-cv-08865, U.S. District Court, Southern District of New York (Manhattan).

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