Judge orders Tesla’s Musk, SEC to justify fraud settlement

Elon Musk

"Elon- when we said suck as hard as you can we didn't mean

Tesla CEO Elon Musk on Thursday tweeted an apparent slight to the U.S. Securities and Exchange Commission (SEC), which opened a fraud lawsuit against him last week.

Musk derided the SEC as the "Shortseller Enrichment Commission" before snidely praising it for "doing incredible work".

However, Musk and the SEC settled the charges over the weekend, with Musk and Tesla agreeing to pay $20 million in fines each and Musk stepping down as Tesla's chairman for at least three years.

A U.S. federal judge has demanded Elon Musk and the Securities and Exchange Commission (SEC) justify their settlement over the Tesla privatisation fiasco.

On Monday, Elon Musk tweeted a Youtube link to the 1990s hip-hop video entitled O.P.P. captioned with "Naughty by Nature", the group behind the popular rap song. "And the name change has is so on point!"

Venting out on Twitter is nothing new for Musk.

Tesla was not immediately available for comment.

The stock dropped as much as 3.8 per cent as of 9:40 a.m. Friday in NY, after Musk fired off more than a dozen tweets targeting the Securities and Exchange Commission and short sellers the night before.

The judge gave Tesla and the SEC one week to submit a joint letter explaining the settlement in further detail.

"Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful US auto company in over a century", the board said.

The settlement still needs approval from the courts.

The stock's decline follows a series of tweets from CEO Elon Musk on Thursday night.

On September 27, the SEC had filed charges against Musk, claiming that he made false statements about taking his company private at $420 a share. They don't include any provision that would prohibit him from voting, as a director of Tesla, on its new chairman or its new directors. Even after being fined $20 million for a single tweet and sued for fraud. he's back.

Updated at 5:25 p.m. PT with Musk's tweet about short sellers.

Musk's latest tweet came after he drew the ire of the SEC over what the regulator called a misleading claim about the electric vehicle maker's stock price.

Under terms of the settlement, neither Musk nor Tesla admitted or denied the allegations.

But regulators chose to balance the penalty for violating securities law with investors' fervor for Musk, who is Tesla's "animating force".

The SEC's complaint was sent out last week and suggests Musk tweeted the take-private proposal, in part, to lift the stock of the company and therefore publish the short sellers.

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