Elon Musk, the CEO and founder of Tesla, has escaped further punishment in a settlement with a regulator in the United States of America over his tweets.
Musk had faced possible fines and removal from his position over a February tweet regarding the production figures if he had been found by a US court to be in breach of an agreement not to mention material information about his company in his tweets without legal approval, as argued by the US Securities and Exchange Commission.
In a settlement today, Musk agreed to “obtain the pre-approval of an experienced securities lawyer” prior to making statements on topics that will include production numbers or sales or delivery numbers, new business lines unrelated to existing ones, projections or forecasts, and regulatory decisions that are previously unpublished.
The SEC said that a tweet that was posted on the 19th of February which said that Tesla would make half a million cars in 2019 violated a settlement from the previous year which required Musk to seek permission from a lawyer for certain statements about his firm, and attempted to hold the entrepreneur in contempt of court.
In the said settlement Musk and Tesla was also required to pay $20 million each, and Musk had to step down as the chairman of the electric car and battery-maker.
It comes after an August message that was posted to Twitter by Musk, where he claimed to have enough funding to take Tesla private at $420 per share, a statement which according to the regulator, misled the investors.
During a court hearing at the start of the month, a New York judge instructed Musk to come to an agreement with the SEC.
Judge Alison Nathan said that the original settlement had a “lack of clarity,” as the two sides disagreed on what Musk had to seek approval for, and informed them to come to an agreement. She stated: “My call to action is for everyone to take a deep breath, put your reasonableness pants on and work this out.”
After the hearing Musk said that he was “pleased” with her decision and wanted to “work through any disagreements directly with the SEC, rather than prematurely rushing to court.”
Today, the judge approved their settlement, resolving the contempt claim of the regulator, and holding Musk to a much clearer standard in his online communications.