06:00 GMT14 April 2021
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    Musk drew the SEC's attention some years ago after his tweets about Tesla’s privatization caused company shares to rise 11 percent which “misled investors.” Legal proceedings led to an agreement with the SEC that committed Musk to get preliminary approval from an "experienced securities lawyer" for any post regarding Tesla’s activities.

    A Tesla share holder filed a lawsuit against company founder Elon Musk and its board, alleging that the tech billionaire put the companies’ billions of dollars of assets at risk and provoked financial loses by posting “erratic” tweets.

    According to the complaint, addressed to Delaware Chancery Court on 8 March and obtained by Bloomberg Law, “further unchecked tweeting by Musk” could “have severe ramifications on the company’s ability to secure financing,” as it “drives out the very voices in the company meant to stand up to him and protect” investors.

    The investor said that Musk "repeatedly violated the terms of the agreement," which includes prior consent for his tweets, and alleged that the company board has failed to control Musk’s Twitter activity.

    Motorists drive past Tesla's primary vehicle factory after CEO Elon Musk announced he was defying local officials' restrictions against the spread of the coronavirus disease (COVID-19) by reopening the plant in Fremont, California, U.S. May 12, 2020
    © REUTERS / STEPHEN LAM
    Motorists drive past Tesla's primary vehicle factory after CEO Elon Musk announced he was defying local officials' restrictions against the spread of the coronavirus disease (COVID-19) by reopening the plant in Fremont, California, U.S. May 12, 2020

    On 26 February 2019, the SEC announced that billionaire Elon Musk had violated its restrictions, imposed in 2018, posting information about Tesla production figures. The SEC and Musk expanded their agreement, forcing Tesla’s CEO to have any posts concerning company activities be checked by lawyers before publication, otherwise Musk and Tesla would separately face a $20,000 fine.

    Earlier in 2018, the Tesla CEO was charged with speculating with the company’s ownership form. Musk tweeted that Tesla would be privatized and that the company could buy back shares from minority shareholders for $420 per share. The price was 20 percent higher than the actual market value of Tesla’s shares at that time.

    Tesla’s stock then soared by 11 percent and after dropping as there were no plans to reclassify the company. Musk faced outrage by both the Tesla board and investors, who filed a series of lawsuits because they had been short-selling. Musk was fined $20 million and agreed to step down as the Tesla board chairman for three years.

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    Tags:
    Elon Musk, US Securities and Exchange Commission (SEC), lawsuit, Tesla
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