Musk and Tesla have until March 11 to respond to an order from a judge explaining why the court shouldn't hold him in contempt after he tweeted about Tesla's production forecasts for the Model 3, a midsize sedan. The agency said the CEO broke an agreement that requires him to vet any public comments that could affect investor decisions.
Former SEC attorneys and other securities lawyers said it looks like a clear violation. Neither Tesla nor the SEC responded to requests for comment.
Musk is still considered a first-time offender, in that he hasn't been convicted of a crime, like Martha Stewart was in 2004, or indicted on criminal charges, like Elizabeth Holmes of Theranos was in 2018, and he isn't quite yet a habitual or serial offender, said Elliot Lutzker, a former attorney in the SEC's enforcement division. So it is unlikely the agency would seek an outright ban.