Elon Musk and the SEC once again work out what he can and can’t tweet

Tesla CEO Elon Musk and the U.S. Securities and Exchange Commission’s long saga might finally be over — but don’t count on it.

On Friday afternoon, Musk — a voracious tweeter and the head of Tesla, a publicly traded electric car company monitored by the SEC — reached an agreement with the regulatory agency after a February tweet about car production numbers. 

Earlier in April, a federal court judge in Manhattan gave Musk and the SEC a few weeks to sort out what the agency considered contempt, even after Musk wrote a clarifying tweet. It was determined that the rules the SEC set for Musk’s tweets were too ambiguous. Musk’s legal team argued at one point that the SEC was trying to take away his First Amendment rights. 

After an extended discussion period that consumed most of April, the two parties finally agreed Friday on new terms for the settlement, mostly concerning what Musk can and can’t tweet about. Since the agreement went up Musk hasn’t been able to stay away from tweeting about it. 

He wrote in a Twitter conversation about who he responds to that “the foolish things I say are entirely my fault,” with a winking-tongue-out emoji. Someone interjected that Musks writes “not many foolish things.” To which Musk responded: “certain regulatory agencies would beg to differ,” in a clear call out to the SEC. 

This all started in the summer of 2018 when Musk tweeted about taking Tesla private. The SEC said that the tweet violated federal securities laws and eventually the two parties settled. Part of that settlement (which also included $40 million in fines) was that Musk’s tweets would be monitored, and he’d have to get approval if they included any “material” information about his company that would affect trading. That did not happen.

So when that February tweet came around, the SEC flagged it as a violation of their agreement. And   now we’ve got a much clearer set of rules Musk has to abide by when he posts on Twitter. A full bullet pointed list (with sub-bullets!) was in the proposed agreement. 

Now Musk needs pre-approval to tweet about anything from this list: 

• the Company’s financial condition, statements, or results, including

earnings or guidance;

• potential or proposed mergers, acquisitions, dispositions, tender offers,

or joint ventures;

• production numbers or sales or delivery numbers (whether actual,

forecasted, or projected) that have not been previously published via

pre-approved written communications issued by the Company

(“Official Company Guidance”) or deviate from previously published

Official Company Guidance;

• new or proposed business lines that are unrelated to then-existing

business lines (presently includes vehicles, transportation, and

sustainable energy products);

• projection, forecast, or estimate numbers regarding the Company’s

business that have not been previously published in Official Company

Guidance or deviate from previously published Official Company

Guidance;

• events regarding the Company’s securities (including Musk’s

acquisition or disposition of the Company’s securities), credit

facilities, or financing or lending arrangements;

• nonpublic legal or regulatory findings or decisions;

• any event requiring the filing of a Form 8-K by the Company with the

Securities and Exchange Commission, including:

• a change in control; or

• a change in the Company’s directors; any principal executive

officer, president, principal financial officer, principal

accounting officer, principal operating officer, or any person

performing similar functions, or any named executive officer;

or

• such other topics as the Company or the majority of the independent

members of its Board of Directors may request, if it or they believe

pre-approval of communications regarding such additional topics

would protect the interests of the Company’s shareholders;

Here’s the full agreement:

The next step is getting the judge’s approval on the agreement. Stay tuned.