Musk faces fresh lawsuit as 2018 tweet comes back to bite him
Elon Musk faces fresh legal challenge from the US stock market watchdog as his Twitter thread continues to cause problems for the electric car giant Tesla.
In 2018, Musk tweeted that he had “funding secured” to take Tesla private, sending its share price soaring.
It prompted subsequently prompted a Securities and Exchange Commission (SEC) lawsuit and an eventual settlement when it emerged he had not secured financing.
However, today the SEC sent the carmaker a subpoena, demanding information about its compliance with a settlement that saw the billionaire step down as Tesla chairman, while remaining chief executive.
The SEC’s latest action adds to Tesla’s pressure from federal auto safety regulators regarding vehicle recalls and investigations related to its driver assisting software.
Tesla in December was hit by a lawsuit over Musk’s social media posts including his Twitter poll on stock sales that pulled down its stock prices. This was not the first lawsuit accusing Musk of violating his 2018 settlement.
In 2018, Musk settled a lawsuit by the SEC over his tweet on taking the company private, agreeing to have the company’s lawyers pre-approve tweets with material information about the company.
As part of the same settlement, Musk also stepped down as chairman of the board, Tesla appointed two new independent directors and both parties paid a $20m penalty each.
Last week, Musk said in a court filing that a tweet he had posted in 2018 saying funding was secured to take Tesla private in a $72bn transaction was “entirely truthful”.