Published on April 5th, 2019 | by Steve Hanley0
Judge Nathan Tells Musk And SEC: “Work It Out!”
April 5th, 2019 by Steve Hanley
Anybody who ever tried to guess what a judge was thinking is a damned fool, but as a general rule, when a judge sends both parties to a dispute away with an admonition to resolve their differences, it’s a sign the court thinks both are acting like spoiled children and it’s time for them to grow up.
That’s pretty much what federal district court judge Alison Nathan did on April 4 when Elon Musk and attorneys for the SEC appeared before her. The Securities and Exchange Commission (SEC) has filed a motion asking the court to hold Musk in contempt for two tweets on February 19. The first said Tesla would manufacture 500,000 cars in calendar year 2019. A short time later he clarified that by tweeting that the company would produce 400,000 in 2019 but would be on pace to make 500,000 a cars by the end of the year — would hit a weekly run rate that, extrapolated by 52 weeks, would equal 500,000.
The SEC took umbrage with the tweets, arguing that they deliberately violated an agreement the company, Musk, and the SEC came to last year after the infamous “taking Tesla private” tweet caused Tesla short sellers to get their BVDs in a bunch. Prior to his court appearance on April 4, Musk said the second tweet was “true, immaterial to shareholders, and in no way a violation of my agreement with the SEC.”
That agreement last year is what led to Musk stepping aside as chairman of the company, a position subsequently filled by Robyn Denholm. It also was supposed to make Musk more cautious when it came to publishing tweets that could affect the company’s stock price.
The thinking among courtroom observers is that if Judge Nathan agreed with the SEC, she would have sanctioned Musk and been done with it. That she didn’t suggests the judge found the SEC plaint less than persuasive.
In court, she told both sides, “Put your reasonableness pants on.” She then ordered both parties to meet with each other for at least one hour in the next two weeks to work out an agreement that will clarify the original order and resolve the pending motion to hold Musk in contempt. They are to file a joint report to the court by the end of the two-week cooling off period.
After the hearing, Musk issued a statement, saying, “We have always felt that we should be able to work through any disagreements directly with the SEC, rather than prematurely rushing to court. Today, that is exactly what Judge Nathan instructed.”
According to a report by CNBC, Musk was asked if the two sides would meet and resolve their dispute in the next two weeks. “Looks like it,” he told reporters with a smirk on his face before driving away in a Tesla Model S. If he was worried by what happened in court on Thursday, he certainly didn’t show it.
Musk Visits Gigafactory 2 in Buffalo
While he was in the area, Musk visited Tesla’s Gigafactory 2 in Buffalo, according to a report by the Buffalo News. What he did or said there is unknown, but so far as we know, this is the first time Musk has been to the factory. Perhaps he is taking a renewed interest in the SolarRoof that is supposed to go into production sometime this year.