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Report: SEC Asks Judge to Hold Elon Musk in Contempt for Violating Deal

The Securities and Exchange Commission has reportedly asked a judge to hold Tesla founder Elon Musk in contempt for violating their deal. Bloomberg reports that the agency claims Musk violated his Oct. 16 settlement with them—which requires him to “seek pre-approval from Tesla Inc. for social media posts and other written communication that would be material to the company or investors.” In their legal filing, the SEC stated that a Feb. 19 tweet from Musk—which claimed Tesla would “make around 500k [cars] in 2019”—did not receive pre-approval by the agency. The agency also said Musk had acknowledged the tweet was inaccurate when he posted a second tweet a few hours later claiming that he “meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week.” “Musk has thus violated the Court’s Final Judgment by engaging in the very conduct that the pre-approval provision of the Final Judgment was designed to prevent,” the filing said. CNBC reports that Tesla shares fell nearly five percent after the news broke. Later Monday night, Musk claimed the SEC hadn't read the Tesla earnings transcript where he stated the company could manufacture “350,000 to 500,000 Model 3s” in 2019. “How embarrassing,” Musk wrote in a tweet.