Elon Musk and the SEC reach agreement requiring him to have an 'experienced securities lawyer' preapprove his tweets about Tesla's business (TSLA)

Elon Musk

The Securities and Exchange Commission and Elon Musk have come to a settlement agreement over the Tesla CEO's use of social media.
The settlement, announced on Friday, requires all of Musk's communication about Tesla's business via social media, the company's website, press releases, and investor calls to be preapproved by a securities lawyer.
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Elon Musk and the Securities and Exchange Commission (SEC) have come to a settlement agreement over the Tesla CEO's errant behavior on social media.

"The (SEC), Musk, and the General Counsel of Tesla met and conferred, and the parties have reached an agreement to resolve the Commission's pending contempt motion against Musk," the filing said.

The settlement, announced on Friday, requires all of Musk's communication via social media, the company's website, press releases, and investor calls to be preapproved by an "experienced securities lawyer."

The settlement requires Tesla to, "implement mandatory procedures and controls (i) providing oversight of all of Elon Musk's communications regarding the Company made in any format, including, but not limited to, posts on social media (e.g., Twitter), the Company's website (e.g., the Company's blog), press releases, and investor calls; and (ii) requiring pre-approval by Securities Counsel of any written communication that contains information regarding any of the following topics:

- - "the Company's financial condition, statements, or results, including earnings or guidance;
  - "potential or proposed mergers, acquisitions, dispositions, tender offers, or joint ventures;
  - "production numbers or sales or delivery numbers (whether actual, forecasted, or projected) that have not been previously published via pre-approved written communications issued by the Company ("Official Company Guidance") or deviate from previously published Official Company Guidance;
  - "new or proposed business lines that are unrelated to then-existing business lines (presently includes vehicles, transportation, and sustainable energy products);
  - "projection, forecast, or estimate numbers regarding the Company's business that have not been previously published in Official Company Guidance or deviate from previously published Official Company Guidance;
  - "events regarding the Company's securities (including Musk's acquisition or disposition of the Company's securities), credit facilities, or financing or lending arrangements;
  - "nonpublic legal or regulatory findings or decisions;
  - "any event requiring the filing of a Form 8-K by the Company with the Securities and Exchange Commission, including:
    - "a change in control; or
    - "a change in the Company's directors; any principal executive
      
      "officer, president, principal financial officer, principal accounting officer, principal operating officer, or any person performing similar functions, or any named executive officer; or
  - "such other topics as the Company or the majority of the independent members of its Board of Directors may request, if it or they believe pre-approval of communications regarding such additional topics would protect the interests of the Company's shareholders;"

In February, the SEC asked the judge that approved their 2018 settlement to hold Musk in contempt of court after Musk tweeted out a projection about Tesla vehicle production. The SEC said in a court filing that Musk violated the terms of their settlement by not receiving approval from Tesla before publishing the tweet.

The settlement followed an August 2018 tweet from Musk saying he had obtained the funding necessary to take Tesla private at $420 per share. The SEC sued Musk over that tweet, saying that Musk was not as close to acquiring funding for the deal as he indicated. Their settlement required Musk to step down as the chairman of Tesla's board of directors for three years, pay a $20 million fine, and receive approval for all future written communications that could be relevant to Tesla shareholders.

Have you worked for Tesla? Do you have a story to share? Contact this reporter at mmatousek@businessinsider.com.

SEC Elon Musk settlement by Benjamin Zhang on Scribd

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