As part of a September settlement, Musk promised to get sign-off from Tesla lawyers for any tweets that "contain, or reasonably could contain" material information—legal jargon for information that's significant for people trading Tesla's stock. The SEC argues that Musk's February tweet, stating that Tesla would produce "around 500k" vehicles in 2019, violated that requirement.
Musk disagrees. He argues that he was merely repeating Tesla's earlier production estimates. And he insists he was entitled to use his own judgment to determine the information was not material—and therefore didn't require pre-approval by Tesla's lawyers.
Tesla is "best positioned to interpret its own policy"
Musk re-iterated these claims in his latest filing. The settlement required Musk to follow a set of Tesla-developed guidelines, and Musk notes that Tesla's lawyers have stated that he hasn't broken those guidelines.
"Tesla—which is best positioned to interpret its own policy—has affirmed to the SEC that Musk complied with the policy," Musk's lawyers wrote in the Friday filing. "This is meaningful evidence that Musk has satisfied his obligations. The court can discharge its order to show cause on these grounds alone."
It's worth noting here that Tesla's general counsel, Dane Butswinkas, abruptly quit on February 20, 2019—one day after Musk's February 19 tweet and the same day the SEC sent Tesla a letter seeking more information about the tweet. Butswinkas had only been on the job for about two months. Under Tesla's policy, Butswinkas was one of the lawyers who was supposed to review material tweets from Musk before they were posted, but Musk never submitted any tweets for his approval.
On March 11, an external Tesla attorney from the law firm of WilmerHale sent the SEC a letter stating that—in Tesla's view—Musk's tweets were not material and therefore Musk has complied with Tesla's tweet approval policy.
"Musk has not tweeted material information"
In its most recent filing, the SEC faulted Musk for failing to get any of his tweets pre-approved since that policy took effect in December. These included tweets about "vehicle tax credits and pricing," "plans for expansion of charging stations inRead More