SEC says Tesla CEO should face substantial fines

Posted April 07, 2019

A United States judge ordered yesterday that the two come to an agreement within a fortnight, and said she could rule on whether Musk violated his recent fraud settlement with the regulator if they failed.

"Everybody take a deep breath, put your reasonableness trousers on and work this out", Nathan said.

The row with the SEC has sparked concerns that Musk - who was already made to step down as chairman under a deal with the regulator - could face further restrictions or even be removed as chief executive during a pivotal time for the company. Musk has said he wanted his company SpaceX to develop a rocket capable of an unpiloted trip to Mars in 2022, with a crewed flight two years later.

Noting that Musk had called his US$20 million fine "worth it,"she also said higher fines for future violations might be needed to ensure that further backsliding would be "not worth it".

This outpouring of distaste is nearly certainly what Musk intended on some level, but also very much not in any way that redeems it on the rating scale I just made up in my head.

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The agency took action after Musk tweeted on February 19 that Tesla would make 500 000 cars in 2019 - up from the 400 000 that the company had estimated until then, an apparent increase on a benchmark tied to profitability.

Musk and the SEC have been embroiled in a legal battle since last August, when the CEO tweeted that he meant to take Tesla private at $420 per share.

Musk declined to discuss the hearing as he left the courthouse, surrounded by a horde of reporters, photographers and television cameras, but said "I feel very loved here".

He did, however, lavish praise on Judge Nathan, calling her "an outstanding representative of the judiciary system".

Nathan pressed Crumpton during the hearing to define the conditions under which Musk should seek approval before he tweets, and drew attention to ambiguity surrounding the rules the SEC sought to enforce. The courtroom appearance doesn't seem to be doing Tesla any favours as, combined with news of the company's biggest sales drop in its history, the auto maker's stock dropped 8 per cent on Thursday.

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Tesla's "issue actually with Europe and China is 'how do we get the cars made and on a boat as such that it reaches customers before end of quarter and we don't have a massive number of cars on the water?'" Musk said. "Today, that is exactly what Judge Nathan instructed", Musk added.

He also turned to twitter where he has 25.5 million follower to promote his "Emo G Records".

He corrected himself in another follow-up and clarified that 500,000 is merely the expected production rate.

Shares of Tesla plunged during Thursday trading after the company disclosed that first-quarter deliveries of its vehicles fell 31 percent from the previous three-month period, warning that its first-quarter income would be negatively impacted.

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