SEC v. Elon Musk, No. LR-24413, Southern District of New York (Feb. 27, 2019) — Press Release

Elon Musk, CEO of Tesla, is accused of contempt for violating a court order by failing to obtain pre-approval for tweets containing material information about the company.

The Securities and Exchange Commission (SEC) filed a motion seeking to hold Elon Musk in contempt for violating a court order stemming from its 2018 securities fraud case. The original 2018 settlement included a $40 million fine and Musk's removal as Tesla chairman. The SEC argued that Musk's tweets constituted a clear breach of the court's injunction, potentially undermining investor protections.

The Securities and Exchange Commission (SEC) filed a motion seeking to hold Elon Musk in contempt for violating a court order stemming from its 2018 securities fraud case. The original 2018 settlement included a $40 million fine and Musk's removal as Tesla chairman. The court order, issued on October 16, 2018, required Musk to obtain pre-approval for any written communications that could contain material information about Tesla. However, Musk allegedly breached this order by posting tweets in early 2019 that contained material information without approval. The SEC argued that Musk's tweets constituted a clear breach of the court's injunction, potentially undermining investor protections. The SEC sought sanctions, including potential fines or restrictions, for what it characterized as willful noncompliance. The outcome is pending, as the SEC has filed a motion for an order to show cause. The case underscores ongoing regulatory scrutiny of Musk's public statements.