Regulators at the Securities and Exchange Commission have sent Tesla two separate warnings about CEO Elon Musk being on thin ice for his tweets in recent years, the Wall Street Journal reported Tuesday, cautioning that the entrepreneur’s recent posts were in violation of a 2018 settlement agreement mandating that lawyers sign off on his social media musings about the company.
One of the tweets under particular scrutiny is one Musk dashed off in May 2020, in which he wrote that Tesla’s stock price was “too high imo.” Twenty minutes after Musk published the tweet, Tesla stocks — valued at roughly $760 a share prior to the post — infamously took a tumble, dropping down to $722, a five percent decrease. The other tweet regulators say ran afoul of the agreement was a reply published in July of 2019 in which Musk proclaimed that Tesla was aiming to make 1,000 solar roofs per week by the end of that year and “spooling up production line rapidly,” in an effort to meet that goal.
According to the SEC, Tesla’s lawyers failed to properly vet both tweets, which both run afoul of the Commission’s attempts to curtail public messages that pertain to “production numbers or sales or delivery numbers.”
“In the face of Mr. Musk’s repeated refusals to submit his covered written communications on Twitter to Tesla for pre-approval, we are very concerned by Tesla’s repeated determinations that there have been no policy violations because of purported carve-outs,” the SEC wrote in its May 2020 letter.
The ramped up SEC scrutiny follows an enforcement action the oversight agency took against Tesla in 2018 in which it alleged that Musk had committed fraud after he tweeted, “funding secured,” in reference to a potential buyout of the company. (The funding had, incidentally, not been secured as of that writing.) In response, the agency charged Musk with securities fraud, and he and Tesla each paid $20 million apiece to settle the case out of court, in addition to Musk agreeing to relinquish his chairman role at Tesla and have lawyers vet his public statements about the company going forward.
Musk, for his part, has been openly antagonistic towards regulators in recent years, at times appearing to mock the restrictions that have been placed upon him.
“SEC, three letter acronym, middle word is Elon’s,” he tweeted in July of 2020.