Tesla Inc.'s chief executive officer and the US Securities and Exchange Commission said in a court filing Friday that they are settling a legal dispute over how Musk posts news about his electric-car company, avoiding a decision by a federal judge in NY on whether the billionaire should be held in contempt of court.
The terms of the agreement, filed in federal court in the Southern District of NY, dictate that Musk is required to seek legal counsel before posting any public statements, including tweets, regarding the electric vehicle company's finances and business operations that could impact investors' views of the company.
The original case goes back to a settlement reached last September after Musk tweeted that he had secured the funding to take Tesla private at $420 a share - a substantial premium over the company's stock price at the time - when he did not.
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. CEO Elon Musk (C) exits after attending a S.E.C. hearing at the Manhattan Federal Courthouse in New York, April 4, 2019.
The new terms require Musk to seek approval for production and delivery numbers-or projections about future numbers-unless those numbers were "previously published via pre-approved written communications".
U.S. District Judge Alison Nathan told Musk and the SEC to resolve their differences, and after a couple of extensions, the two parties finally filed the proposed agreement for Nathan's review and likely approval.
The stock rose in extended trading, gaining as much as 1.4 per cent to US$238.50 at 5:22pm in NY. After an investigation, the regulator sued, saying Musk had misled investors.
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In February, Musk tweeted that Tesla "will make around 500k in 2019".
In the first deal, Musk had also agreed to pay a civil penalty of $20 million and forfeit his role as chairman of the board for at least three years.
In the filing, the two sides said they agreed to make amendments to a deal they struck previous year, laying out more clearly what communications require oversight and approval for Musk.
Musk has been CEO of Tesla since 2008 and has more than 25 million followers on Twitter.
The case is Unsworth v Musk, 18-cv-08048, US District Court, Central District of California (Los Angeles).