Elon Musk should be fined, SEC says
- The SEC says Tesla founder and CEO Elon Musk violated a securities fraud deal by tweeting about the electric car maker's vehicle production without a lawyer's approval.
- Musk's settlement with the SEC stemmed from his tweets last year claiming to have the financing to take Tesla private.
- The hearing comes as Tesla shares slump after it disclosed that vehicle shipments have fallen 31 percent.
A New York judge has urged the U.S. Securities and Exchange Commission and Tesla CEO Elon Musk to settle a dispute over what he may disclose in his tweets.
U.S. District Judge Alison Nathan concluded a contempt-of-court hearing Thursday by telling both sides to meet in the next two weeks. If they can't resolve their differences, she'll rule.
A lawyer for the SEC told the court that Musk should face substantial escalating fines if he keeps violating a deal with the agency. With Musk observing from a defense table, lawyers argued for nearly two hours before Nathan urged a settlement. She called contempt-of-court "serious business" and told both sides to "take a deep breath." She said court-supervised deals must be obeyed, though.
Securities regulators says Musk violated the SEC deal by tweeting about Tesla's vehicle production in February without a lawyer's approval. A previous tweet by Musk about a possible plan to take the company private led to the original round of problems with the SEC.
The October securities fraud settlement stemmed from tweets by Musk in August about having the money to take Tesla private at $420 per share. But Musk didn't have the funding secured. Tesla and Musk each had to pay $20 million in fines and agree to governance changes that included Musk's removal as chairman.
Separately, Tesla shares fell more than 8 percent after after the electric car maker reported that vehicle shipments slumped 31 percent from a year earlier. The company's manufacturing process also slowed during a rocky start to the new year. Tesla said it delivered 63,000 vehicles in the first quarter, almost one-third less than in early 2018. Tesla's stock price is down nearly 20 percent this year.
