FLASH: US Government Closely Eyeing Elon Musk
Tuesday night, Elon Musk Tweeted Tuesday evening that Tesla (NASDAQ:TSLA) would make around 500,000 cars in Y 2019.
Later he corrected himself within hours to say he meant the company would be producing at an annualized rate of 500,000 vehicles by the end of this year.
If sent by another company executive, the posts might read like an innocuous mistake. But Tesla was supposed to have set up internal controls last year to keep CEO Musk from posting material information about the company without pre-approval.
The SEC ordered the EV maker to employ or designate a securities lawyer to review Mr. Musk and other senior officers’ Twitter communications.
Representatives for Tesla and the SEC have not respond yet to requests for comment on Mr. Musk’s tweets.
Tesla and Mr. Musk’s forecasts are a sticking point with the US government authorities. The SEC has subpoenaed the company over projections they made for M-3 production rates during Y 2017 and other public statements relating to output of the sedan.
The JOJ asked Tesla to voluntarily provide information about production projections and the take-private statements and is conducting its own investigation, according to a regulatory filing Tuesday. The company made the same disclosure in November, and said this week there haven not been any material developments in these matters since.
“To our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred,” Tesla said in its 10-K filing Tuesday. The company said it’s cooperating with the authorities and can’t predict the outcome of the investigations. It added that if the government decides to pursue enforcement action, it could have a material adverse impact on the business.
Trial lawyer Dane Butswinkas, 57 anni, resigned Wednesday, but says he will continue to work with Tesla in an outside counsel role. He had been hired on in December to replace Todd Maron, who left the company after leading its legal department since Y 2013.