Tesla Inc TSLA CEO Elon Musk’s tweets related to the electric vehicle maker will continue to remain a subject of a government investigation, Bloomberg News reported on Tuesday, citing the U.S. Securities and Exchange Commission.
What Happened: Musk is looking to end the SEC supervision of his Twitter posts and has through his lawyers claimed a 2018 agreement was being used to “trample” his free speech rights.
The billionaire entrepreneur has also sought the court to block a subpoena by the agency for documents relating to the review of his tweets.
The U.S. regulatory agency reportedly said it will continue to “legitimately investigate” Tesla and Musk’s disclosure through his Twitter accounts to reveal information to investors.
The world’s richest man cannot slip out of agreements “simply because he has found complying with Tesla’s procedures to be less convenient than he had hoped, or because he wishes the SEC would not investigate whether Tesla’s disclosure controls and procedures are actually being maintained and followed,” the agency noted in a court filing, as per the report.
“A deal is a deal.”
Why It Matters: Musk is bound by a 2018 agreement to get permission in advance if he wished to tweet certain posts.
Musk in August 2018 sent out a controversial tweet that said he was considering taking the electric vehicle maker private for $420 per share.
His tweet that said “funding secured” led to the stock reversing course and turning volatile.
Musk's erratic tweets have led to intense regulatory scrutiny, a civil lawsuit, a $40 million fine, and forced him to give up Tesla's chairmanship.
Musk’s tweet last year, when he asked his Twitter followers if he should sell 10% of his stake in the company, led to a massive share sell-off. That led to Tesla's stock losing some 16% over the following two days.
Price Action: Tesla stock closed 7.9% higher at $993.9 a share on Tuesday.
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