Judge tells Tesla, SEC to justify settlement of fraud lawsuit

Judge tells Tesla, SEC to justify settlement of fraud lawsuit

Judge tells Tesla, SEC to justify settlement of fraud lawsuit

Elon Musk's settlement with the SEC is not finalised yet.

West made the comments Tuesday as he checked out student projects at the Detroit College for Creative Studies, a private art school.

The tweet came five days after Musk settled SEC charges that he misled investors in tweets on August 7, including that there was "funding secured" to take his Palo Alto, California-based company private at $420 per share.

Under its terms, Musk doesn't admit or deny the allegations in the agency's lawsuit but will step down as the chairman of Tesla's board of directors for three years and pay a $20 million fine. In the fraud settlement Musk and Tesla were also fined with $20 million each.

According to an account by the Detroit Free Press, West had a busy day in the Motor City, which he documented on social media.

The settlement also required Tesla's board to implement procedures for reviewing Musk's communications with investors, which include tweets.

Tesla chief executive Elon Musk stands on the podium as he attends a forum on startups in Hong Kong, China January 26, 2016. "And the name change is so on point!"

Judge Alison Nathan said it was a regular practice at the Southern District of New York Court to have the parties submit a joint letter explaining why the court should approve a proposed consent judgment.

The settlement agreements Musk and Tesla reached with the Securities and Exchange Commission don't include any kind of bar on Musk's continued service as a director of the vehicle company.

"They promised to have controls to keep him from doing these things", she said. Shares had already fallen 4.4 percent before the tweet to close at $281.83.

Tesla has consistently been one of the most-shorted US stocks as many investors continue to bet on declines in share prices.

Within the hour of the original tweet, Musk responded to a comment on his Tweet professing to apologize for the "typo" in the original tweet (as he seemed to leave out the word "say").

Thomas Gorman, a partner at Dorsey & Whitney in Washington, D.C., said Musk might argue that the latest tweet might be a mere "personal lament", and not a violation of the settlement.

Stephanie Avakian, co-director of the SEC's division of enforcement, during a press conference emphasised that the CEO of a public company has to be careful about making comments publically.

The SEC settlement still needs court approval.

"Elon, please stop", said another.

Musk also dragged BlackRock into his long-running dispute with short sellers, alleging the fund manager was reaping heavy profits by lending shares they hold to this group of investors.

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