A financial filing from Tesla on Monday, February 7, revealed that the U.S. Securities and Exchange Commission delivered another subpoena to them in an ongoing conflict over tweets of the company's CEO Elon Musk, as per CNBC.
The financial regulator is trying to determine whether Musk and Tesla complied with a revised settlement agreement they agreed upon with the agency back in 2019. According to the filing submitted by Tesla, the SEC is looking for information regarding the electric car maker's "governance processes around compliance with the SEC settlement, as amended."
SEC issued the subpoena shortly after Musk polled his tens of millions of followers on social media platform Twitter, asking them if he should sell 10 percent of his ownership stake at Tesla. Musk did sell some of his stakes afterward, but the sales were already part of a plan he adopted in September of last year.
Musk's dispute with the SEC over his controversial tweets stretches back several years. It all started in 2018 when the SEC charged the Tesla CEO with fraud after Musk tweeted that he had "funding secured" to take the company private at $420 per share. The SEC sued Tesla after that tweet, which sent Tesla's stock fluctuating for weeks.
Musk and Tesla eventually reached a settlement with the SEC after that fiasco. The agreement called for Tesla to have a legal and regulatory compliance point person who will pre-approve any of Musk's tweets containing any information regarding the publicly traded company that could affect its price in the stock market. As part of the settlement, Musk had to step down as Tesla's chairman of the board for three years. Musk and the company also had to pay a $20 million fine each.
Musk drew the ire of the SEC again months later when he tweeted about Model 3 production numbers in early 2019. The SEC asked to hold Musk in contempt of court, saying the Tesla boss violated the initial settlement agreement. Musk's tweet about the production numbers of Tesla Model 3 had not been pre-approved by the company's attorneys.
A judge asked Musk and the SEC to settle their differences, which the two parties eventually did. Musk got some clarification regarding the specific content that needed vetting by Tesla's attorneys before he could post on social media.
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Musk remained at odds with the SEC, though, calling them the "shortseller enrichment commission" in 2020. In July of that year, Musk made fun of the SEC by writing a veiled profanity in reference to the federal agency.
He then attempted to make light of whistleblowers in a tweet he posted on December 1, 2021, inviting his followers to blow the whistle on Tesla. A week after Musk sent that tweet, the SEC confirmed that it was investigating a complaint from Stephen Henkes, a former employee of Tesla, in a report on BBC. Henkes said that Tesla had knowledge of but failed to notify the public and shareholders about serious fire risks related to its solar photovoltaic installations.
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