Tesla CEO Elon Musk has been ordered to explain why he should not be held in contempt for allegedly violating his settlement agreement with the Securities and Exchange Commission (SEC) by March 11. The deadline was issued by U.S. District Judge Alison Nathan in Manhattan, just one day after the SEC filed its new complaint against the CEO.
Musk, for his part, has not backed down against SEC’s new claims against him. On Tuesday, he stated that “something is broken with SEC oversight,” after a Twitter follower observed that the agency’s moves against Musk harmed TSLA investors more than the CEO’s tweets. Musk’s recent tweets, particularly his recent statement, have not sat well with former SEC chair Harvey Pitt. In a statement to CNBC, Pitt stated that Musk needs to be punished until he learns to get a handle on his social media habits.
“We’ve got a CEO who, I guess for want of a better word, is irrepressible. He needs to have a certain amount of repression of his instinctive drive to go to Twitter. So I think that holding him in contempt, fining him, and leaving him with strict instructions that if this continues, the punishment will be worse would be in order. At least that’s what I would do under the circumstances,” Pitt said.
Jim Cramer seems to share Pitt’s views. In his recent segment on CNBC‘s Squawk Box, he argued for Musk to be punished. Cramer also called for Musk to be removed from his post as Tesla’s CEO over his attacks against the SEC.
“Musk goes after the SEC as if it’s funny. If this guy is going to attack the SEC, how about removing him? He attacked the SEC. I love him. He’s a genius. But he should be removed,” Cramer said.
The SEC’s claim against the CEO was rooted in a tweet Musk posted last February 19, when he noted that Tesla will “make around 500,000” vehicles in 2019. Musk’s tweet echoed one of his statements from the fourth quarter earnings call, where he estimated that Tesla could produce “maybe in the order of 350,000 to 500,000 Model 3s” this year.
A few hours after his initial tweet, Musk clarified his statement, explaining that the figure refers to a potential annualized production rate of 10,000 vehicles a week. Musk also stated that deliveries for 2019 are still estimated to be about 400,000.
While Tesla stock (NASDAQ:TSLA) dropped as much as 5% after SEC’s claims against Elon Musk were announced, the electric car maker’s shares have since fought back. As of writing, Tesla shares are trading +0.97% at $301.67 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.