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Tesla CEO Elon Musk said he respected the U.S. judicial process, but chuckled when asked if he felt the same about the Securities and Exchange Commission as he entered a federal courthouse Thursday for a showdown with the federal agency.
Musk is in New York for a hearing on contempt charges requested by the SEC after it said he violated the terms of its October settlement over securities fraud. Musk tweeted about the company’s production forecasts on Feb 19, despite agreeing to stop using Twitter to make statements about Tesla’s operations or financial position without company review and approval.
“I have great respect for the justice system and I think the judges in the American system are outstanding,” Musk told reporters before entering the courthouse in lower Manhattan.
When CNBC’s Phil LeBeau asked Musk if he felt the same about the SEC, the CEO laughed and walked away.
Securities lawyers and other industry executives have said that Musk, who has already been removed as chairman, could also lose his post as CEO over his latest skirmish with the SEC.
“The court and SEC in a bit of a bind here; capital punishment would be throwing Musk out of company or banning from running any public company,” Paul Ingrassia, Revs Institute for Automotive Research editor, said on CNBC’s “The Exchange” on Thursday. “He is viewed as being the essence of Tesla. It’s his brainchild. He’s not only the public figure but also the creative genius behind it.”
Tesla’s shares plunged by more than 10% Thursday after the company released its production and delivery data for the first quarter that missed Wall Street estimates and disappointed investors.
“At some point I think people have to start wondering would this company be better off with a calmer managerial presence in charge as opposed to a genius leader but a mercurial leader,” Ingrassia said. “Is the company now at that stage of its development? But Musk has so much of the shares himself that that’s probably not going to happen without an SEC or court order, which i doubt they’ll be willing to do.”