Tesla founder Elon Musk is trying to stay out of more hot water and is promising to do as asked
February 14, 2020
Tesla and its founder Elon Musk are on the front burner again. Less than a year after the Securities and Exchange Commission (SEC) went after Musk for contempt, the agency is headed his way with a subpoena seeking information concerning certain financial data and contracts including Teslas regular financing arrangements, the company wrote in its latest SEC filing.
Ironically, the SECs requisition came on the very same day that it finalized an inspection of forecasts and public comments Musk had made regarding the production of Teslas mass-market Model 3 electric vehicle.
Musk, as he is inclined to do, found his way into hot water after tweeting that Tesla was expected to produce a half-million vehicles in 2019 when its actual estimate was somewhere between 360,000 and 400,000. The SEC considered the tweet misleading and a violation of the deal it struck with Musk to get any messaging that might have market implications approved in advance. Separately, the U.S. Department of Justice had also asked Tesla to voluntarily turn over any information related to production rates.
Cooperation over consternation
When a company gets crossways with the SEC, it really doesnt have much wiggle room. As Musk will attest, when he tweeted out that he was thinking about taking the company private, the SEC slapped him with a civil penalty of $20 million, forced him to appoint an independent director as the Chair of the Board (as well as two additional independent directors to our board of directors), and said the company must improve its disclosure controls and other corporate governance-related matters.
This time around, it looks like Musk has learned his lesson.
We are cooperating with certain government investigations, Teslas SEC filing said. To our knowledge, no government agency in any such ongoing investigation has concluded that any wrongdoing occurred.
Where will this go? Its anybodys guess -- especially Musks.
We cannot predict the outcome or impact of any such ongoing matters, and there exists the possibility that we could be subject to liability, penalties and other restrictive sanctions and adverse consequences if the SEC, the DOJ, or any other government agency were to pursue legal action in the future, the filing stated.