The US Securities and Exchange Commission (SEC) sued Elon Musk, CEO of Tesla and SpaceX. The SEC claims that Musk misled investors by falsely suggesting in a post on Twitter that Tesla would sell 20 percent of its shares.
In a post on Twitter in May 2022, Musk announced that Tesla would sell 20 percent of its shares. This post caused a huge drop in Tesla’s shares.
The SEC claims that Musk has not yet made a final decision to sell 20 percent of Tesla’s shares and that this decision has not yet been approved by a lawyer. The SEC argues that Musk misled investors with this post and therefore violated securities laws.
SEC’s Decision
The SEC is ordering Musk to submit his decision to sell 20 percent of Tesla’s shares and the approval of this decision to a lawyer for approval in his posts on Twitter. If Musk violates this order, he could be fined $50 million and imprisoned for up to 20 years, the SEC said.
The SEC’s decision indicates that Elon Musk should be more careful in his posts on Twitter. If Musk violates this decision, he could face serious penalties.
Musk also signed an agreement with the SEC in 2018. Under this agreement, Musk was required to pre-approve financial information about Tesla in his posts on Twitter. However, in violation of this agreement, Musk announced on Twitter in May 2022 that he would sell 20 percent of Tesla’s shares.
Musk announced that the SEC did not accept this case. In his statement, Musk claimed that the SEC was trying to censor his posts on Twitter.
