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Elon Musk Tweets Cause Tesla Investors To Sue, SEC Get Angry

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Elon Musk Tweets Cause Tesla Investors To Sue, SEC Get Angry

A number of Tesla investors are suing company chief executive Elon Musk over his current tweets.

Bloomberg reports that a handful of institutional investors in the electric automaker filed a lawsuit in Delaware Chancery Court aiming to permanently block Musk’s “using Twitter to make inaccurate statements about the business,” a lawyer from the Laborers’ District Council and Contractors’ Pension Fund of Ohio explained.

After Musk infamously (and falsely) tweeted that he had the essential funding to take Tesla personal in August last year, the executive reached a settlement with the Securities and Exchange Commission. One of the stipulations of the settlement was for Tesla to oversee each of Musk’s future tweets to ensure they had no influence on the vehicle maker ’s stock price.

Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be approximately 400k.

— Elon Musk (@elonmusk) February 20, 2019

Musk appeared to defy this settlement in February when he tweeted that Tesla was on track to build 500,000 vehicles this year.

On February 19, Musk tweeted that “Tesla made 0 automobiles in 2011, but will make around 500k in 2019. ” He later corrected that tweet saying “Meant to say annualized production rate at end of 2019 probably around 500k, i.e. 10k cars/week. Deliveries for year still estimated to be approximately 400k. ”

Tesla admitted in a court filing that Musk hadn’t received approval for these tweets, triggering the SEC to request a federal judge to hold Musk in contempt of violating his SEC settlement.

“Mr. Musk has continually disregarded all attempts to rein in his material misstatements on social media,” lawyer for the Laborers’ District Council Michael Barry said about the new lawsuit.

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