Judge orders Elon Musk and the SEC to put on their 'reasonableness pants' and work things out

  • Lawyers for Tesla CEO Elon Musk sparred with government lawyers in federal court on Thursday.
  • The Securities and Exchange Commission had accused Musk of violating his settlement agreement with the regulatory agency by tweeting that the company would make 500,000 cars this year.
  • Elon Musk attended the hearing but did not testify.
  • Judge Alison Nathan ordered the two parties to take two weeks and find a new resolution.

A federal judge on Thursday ruled that Tesla CEO Elon Musk and federal regulators with the Securities and Exchange Commission (SEC) should hold further mediation to come up with a new way to monitor the billionaire’s tweets.

Musk and the SEC have been embroiled in a legal battle since August, when the CEO tweeted that he intended to take Tesla private at $US420 per share. In a $US20 million settlement with the stock regulator, Musk agreed to have his external communications vetted by a Tesla lawyer.

That all came to a breaking point in February when the SEC asked a judge to find Musk in contempt of court, accusing him of violating that agreement by tweeting that Tesla would make 500,000 cars in 2019.

Read more:
Elon Musk and the SEC are in a fierce battle over one of Musk’s tweets – here’s what you need to know about their dispute

In Thursday’s hearing at a packed courthouse in Manhattan, lawyers for Musk and the SEC made their cases in 45-minute oral arguments. The hearing ended with a simple order from Judge Alison Nathan: make a new resolution. SEC lawyers also said they want to set up a framework for future violations, including escalating fines.

“My call to action is for everyone to take a deep breath, put your reasonableness pants on and work this out,” she said, according to reporters in the courtroom.

As he left the courthouse, Musk said he was “very happy” with the outcome, according to Bloomberg, and that he was very impressed with the judge’s analysis.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.