NEW YORK (Reuters) – Lawyers for Elon Musk and the U.S. Securities and Exchange Commission will square off in a Manhattan courtroom next week over whether the Tesla Inc chief executive should be held in contempt over one of his tweets.
FILE PHOTO: Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. REUTERS/Aly Song
U.S. District Judge Alison Nathan scheduled oral argument on an SEC contempt motion for April 4 at 2 p.m. EDT (1800 GMT), after both sides said they saw no need for an evidentiary hearing.
Musk was accused by the SEC of violating his October 2018 fraud settlement with the regulator by tweeting on Feb. 19 to his more than 24 million Twitter followers that Tesla could build around 500,000 vehicles in 2019.
The SEC said that tweet was improper because Musk did not get advance approval from Tesla.
Musk’s lawyers have said the tweet was not material, and merely restated a target for his Palo Alto, California-based electric car company that he had discussed publicly in January.
John Hueston, a lawyer for Musk, did not immediately respond to requests for comment. The SEC did not immediately respond to a similar request.
The settlement was intended to resolve a lawsuit over a Twitter post last Aug. 7 in which Musk said he had “funding secured” to take Tesla private at $420 a share.
It called for Musk and Tesla to each pay $20 million civil fines, and for Musk to step down as Tesla’s chairman.
Legal experts have said a contempt finding could subject Musk to a higher fine, further restrictions, or even removal from Tesla’s board or as chief executive. Tesla shares closed Tuesday up $7.35, or 2.8 percent, at $267.77 on the Nasdaq.
The case is SEC v Musk, U.S. District Court, Southern District of New York, No. 18-08865.
Reporting by Jonathan Stempel in New York; editing by Leslie Adler and Lisa Shumaker