Musk, Tesla’s Board sued for tweeting in breach of SEC agreement

ONE Tesla Inc. The investor sued CEO Elon Musk and his board in Delaware, claiming that Musk exposed the company to billions in potential liabilities and market losses by continuing to send “erratic” tweets, despite an agreement with regulators that require pre-approval of its social media activity.

The lawsuit, made public on Friday in the Delaware Chancellery Court, accuses the electric vehicle maker’s advice of failing to control Musk’s behavior online, even though he has repeatedly violated a 2018 agreement with the Securities and Exchange Commission. .

The deal, which included payments of $ 20 million each from Musk and Tesla, required the company to adopt new strict supervisory procedures related to Musk’s posts on social media.

After Musk violated the terms of the deal almost immediately in 2019, the new compliance rules were tightened, according to the complaint.

But he reportedly “continued to tweet without the required pre-approval,” while Tesla scoured his in-house lawyers.

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“Musk’s misconduct” and “the failure of Tesla’s board to ensure compliance” “caused substantial damage” to the company, including large legal penalties and “billions of dollars lost in market capitalization,” the suit says.

The complaint was originally filed under secrecy on March 8.