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SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

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Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#301

Post by SimbaOnSteroids »

gamblor956 wrote: post #292
SimbaOnSteroids wrote: post #167

Earlier quoted context omitted.

Why are you bawking at OP's software solution, in favor of a much more complicated software solution?

The solution I favor is the one that Musk agreed to in his legal settlement with the SEC: have a human review his tweets before he hits the post button. No additional software required. If Tesla wants, they can overengineer a solution like they did with the Alien Dreadnought, but there's a zero-cost solution already available to them.

My point is only a robot could adjust their behavior that fast to 100% comply with the SEC agreement.

Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#302

Post by Wowfunhappy »

spectramax wrote: post #3

At this point, the board of directors should just demand deletion of his Twitter account. I admire Elon for his vision, and actually also admire his radical style despite of its unpopular image - I watched the video where he smoked pot on the radio show. It was a really amazing conversation about future of humanity. He just needs to stop tweeting. You may say it’s fixing the symptom, but here if we take Twitter away,…

I used to find Twitter a really great outlet for my brain when I needed a 60 second break from a task, and no more. I kept my feed fairly sparse, and tweets were so short, so I could glance at my timeline without worrying about getting lost and losing track of time.

They have since slowly killed this value, by changing how the timeline is ordered, increased character limit, etc.

Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#303

Post by Dylan16807 »

sokoloff wrote: post #300
Dylan16807 wrote: post #299

Earlier quoted context omitted.

> However a statement that "Tesla is going to begin shipping a new model of car" or "Tesla is going to begin shipping the Tesla truck" or "Tesla is going into the solar business by bailing out my other company" or other statements would be material (and therefore subject to pre-approval). If those are all things that were in a recent public report, I don't see a difference. They're all public information about the co…

That they were in a recent (but not within 2 days) public report is not in compliance with the prior consent decree entered into with the SEC from his prior misleading tweets in the late summer of 2018 which required the company to institute and executives to follow a policy designed to prevent such misleading tweets in the future. The company elected to enact a policy that clearly requires any edits to previously re…

If it was material information, he very clearly violated the policy.

The rules about editing don't matter, because this post wasn't an edit.

But what does "information material to Tesla or its stockholders" actually mean?

If we take it completely literally, then almost any tweet that mentions Tesla would be in violation.

Maybe that's the actual intent. But it doesn't much sense. Why wouldn't the agreement just say that? And he's posted tons of tweets about Tesla, largely referencing news articles, and the SEC didn't say a word about any of them. Did he get approval for every single one of them? I think it's meaningful that the only tweet the SEC complained about was the one that appeared to have new information.

It seems like there's an implication that to be "material" the information has to actually matter to the people that get it. If he cites something that was in a news article, such as the 500k number, then it wouldn't be a problem, because everyone already has it.

And again, it's not an edit, so he can't be breaching the rules about edits. It's either a straightforward release of material information and he's in violation, or it doesn't count as material information and he's off the hook.

Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#304

Post by sokoloff »

Dylan16807 wrote: post #303
sokoloff wrote: post #300

Earlier quoted context omitted.

That they were in a recent (but not within 2 days) public report is not in compliance with the prior consent decree entered into with the SEC from his prior misleading tweets in the late summer of 2018 which required the company to institute and executives to follow a policy designed to prevent such misleading tweets in the future. The company elected to enact a policy that clearly requires any edits to previously re…

If it was material information, he very clearly violated the policy. The rules about editing don't matter, because this post wasn't an edit. But what does "information material to Tesla or its stockholders" actually mean? If we take it completely literally, then almost any tweet that mentions Tesla would be in violation. Maybe that's the actual intent. But it doesn't much sense. Why wouldn't the agreement just say th…

Is there any possibility in your mind that releasing a projected number of sales that is on the high end of a range previously given (which would be an edit of sorts) and was false/misleading was not material information to investors or prospective investors?

I have zero doubt it’s both material and misleading, even though material would have been enough to breach the prior agreement, but the combination of both is unlikely to escape the SEC attention.

I also don’t think this is anywhere near as bad as the summer “Funding Secured” outright fraud. If he’d done them in the opposite order in time, we might not ever be talking about this one and almost surely wouldn’t be getting SEC ire over this one (and obviously couldn’t get a contempt of court charge). With the pattern of facts as alleged, I think he’s well earned a contempt of court charge, and is likely both legally and literally true that he has contempt for the court.

Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#305

Post by Dylan16807 »

sokoloff wrote: post #304
Dylan16807 wrote: post #303

Earlier quoted context omitted.

If it was material information, he very clearly violated the policy. The rules about editing don't matter, because this post wasn't an edit. But what does "information material to Tesla or its stockholders" actually mean? If we take it completely literally, then almost any tweet that mentions Tesla would be in violation. Maybe that's the actual intent. But it doesn't much sense. Why wouldn't the agreement just say th…

Is there any possibility in your mind that releasing a projected number of sales that is on the high end of a range previously given (which would be an edit of sorts) and was false/misleading was not material information to investors or prospective investors? I have zero doubt it’s both material and misleading, even though material would have been enough to breach the prior agreement, but the combination of both is u…

Let me put it this way. If he goes on twitter and lies, then he can get in massive trouble but I don't think this agreement applies. This specific agreement is about him releasing actual information.

I don't consider lies to be "material information".

So in this case he was quoting public info, and he was misleading.

The agreement only cares about the first half of that sentence, and there are reasonable arguments in either direction about whether a quote of public info violates the agreement.

Then we come to the "misleading" part. Maybe he gets in trouble but I think using the agreement for that is barking up the wrong tree. Also people should expect tweets to have sloppy phrasing.

Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#306

Post by manicdee »

LiquidSky wrote: post #253
manicdee wrote: post #240

Earlier quoted context omitted.

He did no such thing. You are probably referencing a series of tweets where Elon was openly contemplating what would be required to buy back Tesla shares. The settlement with SEC clearly stated that no fault was found and no guilt admitted. Why people get so excited about Musk spewing numbers over Twitter is beyond me, when the responsible course of action is to verify claims against other better vetted sources. The…

>He did no such thing. You are probably referencing a series of tweets where Elon was openly contemplating what would be required to buy back Tesla shares. The settlement with SEC clearly stated that no fault was found and no guilt admitted. Yes, that's the "slap-on-the-wrist settlement" for Musk's securities fraud the parent was referring to. >Why people get so excited about Musk spewing numbers over Twitter is beyo…

Your claim that the purpose was to manipulate the market has no evidence to support it.

If you want to talk about cults at least support your argument with evidence.

Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#307

Post by dragonwriter »

vinay_ys wrote: post #262
spectramax wrote: post #3

At this point, the board of directors should just demand deletion of his Twitter account. I admire Elon for his vision, and actually also admire his radical style despite of its unpopular image - I watched the video where he smoked pot on the radio show. It was a really amazing conversation about future of humanity. He just needs to stop tweeting. You may say it’s fixing the symptom, but here if we take Twitter away,…

So apparently, Elon's twitter account is seen as source of official news about Tesla by investors [0]. Given that, it is reasonable for SEC to take this position. But on a bigger scheme, it is sad to see this happening while "puffery" is legal and the damage it is causing is far bigger than anything elon's tweets have caused. https://www.youtube.com/watch?v=t0CyBv18A5k 0. This line is in the 2013 8-K filing by Tesla:…

Puffery is a form of lying to consumers, Musk's problem is with laws around lying to investors.

“Capitalism” wasn't named “capitalism” by it's opponents because it protects consumers and leaves capitalists out in the cold.

Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#308

Post by sokoloff »

Dylan16807 wrote: post #305
sokoloff wrote: post #304

Earlier quoted context omitted.

Is there any possibility in your mind that releasing a projected number of sales that is on the high end of a range previously given (which would be an edit of sorts) and was false/misleading was not material information to investors or prospective investors? I have zero doubt it’s both material and misleading, even though material would have been enough to breach the prior agreement, but the combination of both is u…

Let me put it this way. If he goes on twitter and lies, then he can get in massive trouble but I don't think this agreement applies. This specific agreement is about him releasing actual information. I don't consider lies to be "material information". So in this case he was quoting public info, and he was misleading. The agreement only cares about the first half of that sentence, and there are reasonable arguments in…

Excerpts rom the SEC court filing: The SEC required this provision as a term of its settlement with Musk in order to prevent Musk from recklessly disseminating false or inaccurate information about Tesla in the future. On February 19, 2019, Musk tweeted, “Tesla made 0 cars in 2011, but will make around 500k in 2019.” Musk did not seek or receive pre-approval prior to publishing this tweet, which was inaccurate and disseminated to over 24 million people. Musk has thus violated the Court’s Final Judgment by engaging in the very conduct that the preapproval provision of the Final Judgment was designed to prevent.

As one of the terms of his settlement, Musk agreed to comply with procedures implemented by Tesla that would require him to seek pre-approval of any written communications, including social media posts, that contained or reasonably could contain information material to Tesla or its shareholders.

Consistent with the Court’s Tesla Judgment, on December 11, 2018, Tesla adopted a “Senior Executives Communications Policy” (the “Policy”). Written Communications that contain, or reasonably could contain, information material to Tesla or its stockholders must, prior to posting or other publication, be submitted to Tesla’s General Counsel and Disclosure Counsel (or in the event of the General Counsel’s unavailability, Tesla’s Chief Financial Officer and Disclosure Counsel) for pre‐approval. Authorized Executives are not authorized to post or publish Written Communications that contain, or reasonably could contain, information material to Tesla or its stockholders without obtaining pre‐approval. The Policy provides a non-exclusive list of examples of information that may be “material to Tesla or its stockholders,” which includes “projections, forecasts, or estimates regarding Tesla’s business.” Id. at 1-2. Finally, Tesla’s Policy requires that [i]f an Authorized Executive (i) further edits a pre‐approved Written Communication, or (ii) desires to release a Written Communication more than two (2) days, after receipt of written pre‐approval, such Authorized Executive will re‐confirm the pre‐approval in writing in accordance with this Policy prior to release.

Could you make an attempt at arguing the reasonable argument in the other direction?

Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#309

Post by Dylan16807 »

sokoloff wrote: post #308
Dylan16807 wrote: post #305

Earlier quoted context omitted.

Let me put it this way. If he goes on twitter and lies, then he can get in massive trouble but I don't think this agreement applies. This specific agreement is about him releasing actual information. I don't consider lies to be "material information". So in this case he was quoting public info, and he was misleading. The agreement only cares about the first half of that sentence, and there are reasonable arguments in…

Excerpts rom the SEC court filing: The SEC required this provision as a term of its settlement with Musk in order to prevent Musk from recklessly disseminating false or inaccurate information about Tesla in the future. On February 19, 2019, Musk tweeted, “Tesla made 0 cars in 2011, but will make around 500k in 2019.” Musk did not seek or receive pre-approval prior to publishing this tweet, which was inaccurate and di…

The argument is that "information material to Tesla or its stockholders" only applies to information that wasn't already public.

The tweet may have appeared to have nonpublic information, but it didn't actually have any.

Therefore the tweet didn't need approval.

That's the core of the argument. Is that clear enough? I already tried to explain why I think it's reasonable in previous posts, but I can do it again if you want me to.

Re: SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

#310

Post by sokoloff »

Dylan16807 wrote: post #309
sokoloff wrote: post #308

Earlier quoted context omitted.

Excerpts rom the SEC court filing: The SEC required this provision as a term of its settlement with Musk in order to prevent Musk from recklessly disseminating false or inaccurate information about Tesla in the future. On February 19, 2019, Musk tweeted, “Tesla made 0 cars in 2011, but will make around 500k in 2019.” Musk did not seek or receive pre-approval prior to publishing this tweet, which was inaccurate and di…

The argument is that "information material to Tesla or its stockholders" only applies to information that wasn't already public. The tweet may have appeared to have nonpublic information, but it didn't actually have any. Therefore the tweet didn't need approval. That's the core of the argument. Is that clear enough? I already tried to explain why I think it's reasonable in previous posts, but I can do it again if you…

It is clear enough now; I missed that before.

I missed that as the thrust of your argument, because even if the information in that tweet was "material but not non-public due to previously approved disclosure", it would fall afoul of the "more than 2-days since approved" and "approved previously but now has edits" restrictions, which still leaves Musk in violation of the policy and therefore the court agreement.

(I also believe that the update of the range from "350k-500k" [previously public] to "around 500k" [in the tweet] to be a material update when given by the CEO of a company and that the SEC will argue that is also the case, but I agree/admit that there's some room for argument on that point.)

Thank you for the topic-centered discussion and I hope you experienced (as I did) this exchange as "disagreeing without being disagreeable".

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