SEC Claims Elon Musk Violated Agreement Requiring Tesla to Approve His Tweets

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The Securities and Exchange Commission reportedly informed Tesla last year that company founder and CEO Elon Musk violated an agreement to refrain from writing messages on Twitter without having them approved by company attorneys.

The agency informed Musk in both 2020 and 2019 that his tweets about Tesla’s stock price violated his settlement agreement, according to new correspondence records obtained and published on Wednesday by The Wall Street Journal. Musk and Tesla each paid $20 million to settle a 2018 SEC enforcement action alleging that he had committed fraud by tweeting about a potential buyout of the company, and Musk agreed that he wouldn’t opine on similar topics without approval from his attorneys.

Musk subsequently violated the agreement, according to the agency, including with his May 2020 comment, “Tesla’s stock price is too high imo.” That incident sent the company’s stock price spiraling.  Tesla argued the comment was Musk’s “personal opinion,” despite his position as its top leader, while Tesla attorney Alex Spiro suggested the SEC was unjustly seeking to “harass” Musk, writing to the agency the same month, “The serial nature of these investigations leaves us gravely concerned that the SEC is targeting Mr. Musk for an improper purpose.”

The new revelations come after months of Musk’s tweets drawing attention for their impact on cryptocurrency prices. The price of Bitcoin soared by around 60 percent after Musk announced in January that Tesla had invested $1.5 billion in it. The company sold a portion of its holdings at a profit before Musk said he had concerns about Bitcoin’s environmental impact, leading the price to fall by nearly 50 percent. Days later, he suggested that his concerns had been mostly assuaged, leading prices to rise once again.