Tesla failed to oversee Elon Musk's tweets, US SEC letters claim: Report

The SEC had ordered the electric vehicle manufacturer to vet any public communications Elon Musk made regarding Tesla.

United States’ Securities and Exchange Commission (SEC) – the securities watchdog – told Tesla in 2020 that Chief Executive Officer Elon Musk's use of Twitter had twice violated a settlement requiring his tweets to be preapproved by company lawyers, the Wall Street Journal reported on June 1.

The SEC had ordered the electric vehicle manufacturer to vet any public communications Musk made regarding Tesla. This came after the billionaire’s August 2018 tweet in which he had claimed that “funding [had been] secured” to possibly take the company private in a $72 billion transaction.

In correspondence sent to Tesla in 2019 and 2020, the SEC said tweets Musk had written about Tesla's solar roof production volumes and its stock price were not pre-approved by the company's lawyers, WSJ reported, citing records of communication.

“Tesla has abdicated the duties required of it by the court's order,” the newspaper cited a letter signed by a senior SEC official as saying. either SEC nor Tesla immediately commented on the news report.

Moneycontrol could not independently verify the report.

Musk – currently one of the five centibillionaires – is also the founder of SpaceX, The Boring Company, and co-founder of Neuralink and OpenAI.

In March, Musk and the Tesla board were sued by a shareholder who had accused the 49-year-old of violating his 2018 settlement with the SEC over his Twitter use.

According to the complaint, Musk's “erratic” tweets, including a post last May 1 that Tesla's stock price was ‘too high,” and the failure of Tesla's board to monitor his compliance with the SEC settlement have exposed shareholders to billions of dollars of losses.