Musk Cites First Amendment Rights in SEC Contempt Case

Tesla Inc. CEO Elon Musk, citing his right to free speech, asked a federal court in New York City last night to dismiss an SEC request to find him in contempt of an October agreement to stop misleading investors.

Musk, who has frequently aired his disdain for the Securities and Exchange Commission, describes the commission’s complaint as an “unprecedented over-reach” and “unconstitutional power grab.”

The SEC filed the contempt request two weeks ago. The claim arose after Musk predicted in mid-February that Tesla would build about 500,000 vehicles this year. He later corrected himself by saying the company aims to achieve an annualized production rate of “probably” 500,000 units by the end of December.

Musk’s 33-page filing last night insists he has done nothing to violate the earlier SEC settlement. That agreement stemmed from his false claim last summer that he had secured funding to take the company private.

Under terms of the settlement, Musk is supposed to allow his tweets to be reviewed by Tesla lawyers before they are sent. But his filing concedes that has never happened since the settlement was reached. But his attorneys argue that Musk “correctly used his discretion” in determining that the contested tweet “was not material.”