A federal judge in New York will hear oral arguments next week in a lawsuit brought by the US Securities and Exchange Commission that seeks to hold Tesla CEO Elon Musk in contempt for violating a settlement deal.
The hearing is scheduled for 2 pm ET at a Manhattan courtroom. It’s unclear whether Musk will be present.
Judge Alison Nathan on Tuesday set a hearing for April 4. It is unclear when she will issue a ruling.
If she sides with regulators, Musk could face another hefty fine and further limits to his social media use. The judge could oust Musk from the CEO seat, although she is not expected to rule that harshly. Nathan could also toss out the settlement with the SEC, effectively reopening the agency’s litigation against Musk and Tesla.
The SEC claims Musk violated its 2018 settlement deal when he said in a February 19 tweet that Tesla will make around 500,000 cars in 2019. Hours later, he posted another tweet that said the company will actually deliver 400,000 cars this year.
Although Musk corrected his mistake, regulators said he had “once again published inaccurate and material information about Tesla to his over 24 million Twitter followers,” according to court papers.
Tesla had agreed to establish a board committee to oversee Musk’s posts. In a court filing, Tesla conceded Musk did not receive pre-approval from anyone on that committee for his February posts, but the company has since claimed that he didn’t need it.
Musk’s standoff with the SEC started last year when he claimed in a tweet that he was “considering” taking Tesla private at $420 a share and that he had secured funding for the deal. That sent Tesla’s stock surging.
But the SEC later said funding was not, in fact, secured. A settlement deal reached in October saddled Musk and Tesla with $40 million in fines and required Musk to step down as the company’s chairman, though he retained the role of CEO.