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The U.S. District Judge Will Hear Both Sides on April 4 for Elon Musk Contempt Case

A U.S. federal judge will look into the case filed by SEC against Tesla CEO Elon Musk. In the verdict, the US Securities and Exchange Commission seeks to secure Musk in contempt for breaching a settlement deal. Thus attorneys for Tesla CEO and SEC will confront in a Manhattan court next week. They will dispute whether Musk should be held in contempt over his tweet. Both sides revealed that they do not require a hearing with evidence. Thus Alison Nathan, the U.S. District Judge, scheduled an oral argument on the case for April 4 at 2 p.m. EDT.

SEC claims that Musk breached his previous fraud settlement with the government regulator. In a tweet on Feb. 19, he revealed crucial information of Tesla to his more than 24 million followers on Twitter. As per the SEC, that tweet was improper because Musk did not receive pre-permission from Tesla. On the other hand, Musk’s attorneys defend by saying that the tweet did not include any crucial information. Tesla claims that Musk does not require any permission. While Musk insists he has carefully tried to follow the court settlement. The CEO alleges that SEC’s appeal is a breaking his basic human right to free speech. It is not the first time SEC is suing Musk for his tweets. Last year, in August, he tweeted that he intends to take Tesla private at $420 per share. As a result, the statement increased the company’s stock.

At the time, SEC found that Musk had not secured the funding. Thus in September, the regulator dragged Musk to court for misguiding investors. Eventually, both Tesla and Musk paid compensation of $20 million as a part of the settlement. The regulator also pressurized Musk to step back from the company’s chairmanship. Still, Musk remains on the post. In the latest chapter of the battle between SEC and Musk, if he is found guilty this time, Musk may face a fine. It may limit the usage of social networks for the CEO, as well as the court may order to step back from the chairmanship. Besides, the U.S. District judge could discard the settlement with the regulator. The case may effectively reopen the agency’s case against Musk and Tesla.

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Jason Amato

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