Tesla CEO Elon Musk is no stranger to Twitter or its users. Musk is very active on the platform and has used it to answer questions about his ventures or specific projects. He has tweeted about his thoughts on cryptocurrencies as well.
Simply put, Musk is not shy of sharing his opinions or thoughts on just about anything. Sprinkled in between, of course, are cryptic tweets about memes and anything else his mind thinks of.
Even though sharing your opinions on the microblogging social media platform can get you into trouble sometimes, Musk takes it one step further by having the actual Securities and Exchange Commission sue him for a tweet he made in 2018.
Elon Musk Tweets About Going Private, Tesla Stock Price Goes Down
Musk tweeted in 2018 about taking the company private and having "funding secured," as reported by Engadget. The SEC claimed that Musk committed fraud about the potential buyout of his company, noting it is false and misleading.
The lawsuit also sought to ban Musk from serving as an officer of a public company. Steven Peikin, Co-Director of the SEC's Enforcement Division, stated in a press release that "corporate officers hold positions of trust in our markets and have important responsibilities to shareholders."
Shareholders could either to sell at 420 or hold shares & go private— Elon Musk (@elonmusk) August 7, 2018
The calculation of the $420 price per share--which was a rounded-up estimate because it was also a nod to the significance of the number in marijuana culture which Musk thought would be funny--could have been misleading investors.
News of the government lawsuit caused Tesla's stocks to drop.
Musk paid $20 million to settle that case, according to The Wall Street Journal. Tesla also paid $20 million and agreed to have the CEO's public statements on social media platforms checked by company lawyers.
Tesla's Lawyers Not Holding Their End of the Bargain
Now, according to the latest report by The Wall Street Journal, the SEC has sent correspondence to the electric vehicle company back in 2019 and 2020. The SEC said that the tweets Musk posted about Tesla's solar-proof production volumes and the value of Tesla stocks had not undergone the required pre-approval by Tesla's lawyers as agreed upon in 2018.
Spooling up production line rapidly. Hoping to manufacture ~1000 solar roofs/week by end of this year.— Elon Musk (@elonmusk) July 30, 2019
The SEC noted that such figures for Tesla's production could be misconstrued and mislead investors and potential investors of what the company can and cannot accomplish within that timeframe, which can be dangerous. Musk has also previously mocked the SEC calling them the "Shortseller Enrichment Commission" a few months after settling fraud claims with the agency.
Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!— Elon Musk (@elonmusk) October 4, 2018
"Tesla has abdicated the duties required of it by the court's order," the letter written by the SEC in May 2020 said, per The Wall Street Journal. The organization mentioned how the EV company has failed "to enforce these procedures and controls despite repeated violations by Mr. Musk."
The company said that the tweet regarding Tesla's stock prices being "too high" fell outside the agreed topics, as furthered by Engadget, because it was Musk's "personal opinion" as marked by his use of the abbreviated term "IMO" which means "in my opinion."
The tweet, however, caused a lot of profit losses for a lot of Tesla investors, which did result in one lawsuit filed.
Dude...I just lost $10k because of this tweet. Wtf is wrong with u— Elvis 🇺🇸 (@TradeLikeElvis) May 1, 2020
So far, the Tesla CEO has not made any public statements regarding this. Maybe the company lawyers are being more stringent now.