Elon Musk Argues Regulators Overstepped in Tweet Contempt Quest

Elon Musk Argues Regulators Overstepped in Tweet Contempt Quest

So for now, we can assume that in the coming months the production of the new Model 3 is going to be quite low.

In the meantime, investors still have doubts about Tesla's ability to increase Model 3 production and demand to its target 500,000-units-per-year level.

Lawyers representing Tesla chief Elon Musk have responded to the Securities and Exchange Commission's motion to have the executive held in contempt for allegedly violating a settlement agreement.

"If he is going to argue as his lawyers did in part in the document they filed yesterday, that he has a first amendment right to say whatever he wants, he doesn't because he gave that right up when he entered into a consent decree with the SEC over the comments that he made past year", Fox News senior judicial analyst Judge Andrew Napolitano said during an interview on "After The Bell" Tuesday.

On Feb. 19, Musk tweeted: "Tesla made 0 automobiles in 2011, however, will make around 500k in 2019". "In other words, we will only close about half as many stores, but the cost savings are therefore only about half". In addition, The Daily Mail reported that angry owners had reached out to the company after purchasing Autopilot software for $5000, soon before the prices were discounted. Tesla stated that the people holding the reservation will possibly be getting the vehicle in near 4 weeks. But Musk did provide a few tidbits in a tweet last week.

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The settlement comes from when the SEC sued Musk last September for committing securities fraud, after the CEO announced in August that he had the "funding secured" to take Tesla private. The SEC request that Musk be held in civil contempt "for a single, immaterial tweet that dutifully complied with the Order" is incorrect on the facts and on the law, the filing argued.Musk merely put his "shorthand gloss" on Tesla production numbers consistent with information already public and in a manner that was "celebratory and forward-looking", according to his attorneys.

Tesla declined to comment on Tuesday's layoff.

As part of that settlement, Musk stepped down as the company's chairman and he and Tesla agreed to pay US$20 million each in fines. It's also worth noting that Tesla has missed production goals in the past.

However, Musk doesn't seem to agree with the SEC's allegations this time. As it happens, the SEC watches 60 Minutes, and that interview was cited in the agency's filing. "Musk never consented to and would not consent to such a sweeping gag order".