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Elon Musk, SEC Reach Agreement On Twitter Use


Tesla Inc.'s (TSLA) Chief Executive Officer Elon Musk and the U.S. Securities and Exchange Commission have reached a deal related to Musk's tweets about the luxury electric car maker.

According to a filing in federal court in Manhattan, the SEC and Musk have agreed that a company lawyer must pre-approve Musk's tweets related to Tesla's financial health, delivery numbers, or sales figures, among other things. Musk, who has been CEO of Tesla since 2008, has over 24 million followers on Twitter.

The two sides have agreed to amend the original settlement agreement reached last year over the "funding secured" debacle that prompted the SEC to attempt to install oversight over Musk's tweets. However, the amendment now needs to be approved by U.S District Court Judge Alison Nathan.

According to the filing, Musk now needs Tesla's securities lawyer to pre-approve any public, written communication on Tesla.

These include, among other things, communication by Musk about Tesla's financial condition, statements, or earnings results; potential or proposed mergers, acquisitions or joint ventures; production numbers or sales or delivery numbers; new or proposed business lines; non-public legal or regulatory findings or decisions; and any event requiring the filing of a Form 8-K by the company with the SEC.

If the deal is approved by the judge, Musk will no longer face the prospect of being held in contempt for violating the earlier settlement with the SEC.

In March, Musk said the SEC was overreaching and infringing on his free speech by seeking a contempt ruling over the tweets he sent on February 19.

"Tesla made 0 cars in 2011, but will make around 500k in 2019," Musk tweeted, before clarifying a few hours later, "Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k."

The SEC claimed that the tweet violated an agreement from last fall, when Musk settled an SEC fraud investigation over another tweet, the now-infamous "funding secured" claim about Tesla going private.

As part of that deal, Musk agreed that Tesla would have oversight and pre-approval over his tweets that are material to the company. He also agreed to pay a $20 million fine and gave up his seat as Tesla chairman.

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