Elon Musk - SEC Proposed Agreement
Elon Musk - SEC Proposed Agreement
Elon Musk - SEC Proposed Agreement
In accordance with the parties’ agreement, the Securities and Exchange Commission (the
“Commission”) respectfully submits this consent motion to amend the Final Judgment entered by
this Court as to Defendant Elon Musk (“Defendant”) on October 16, 2018 (the “Final
2. On September 29, 2018, the parties reached a settlement agreement that was
submitted to the Court for its approval. Dkt. No. 6. On the same day, the Commission filed a
settled Complaint against Tesla, Inc. (“Tesla” or the “Company”) alleging that the Company
violated the federal securities laws. SEC v. Tesla, Inc., 1:18-cv-8947-AJN-GWG, Dkt. Nos. 1, 3.
3. On October 16, 2018, the Court entered Final Judgments against both Musk and
Tesla. The Final Judgment as to Musk ordered him to comply with procedures implemented by
Tesla that would require him to seek pre-approval of any written communications that contained
or reasonably could contain information material to the Company or its shareholders. Dkt. No.
1
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14, at 13-14. Similarly, the Court’s Final Judgment as to Tesla ordered the Company to
Musk that contained, or reasonably could contain, information material to the Company or its
4. On February 25, 2019, the Commission filed a motion alleging that Defendant
violated the pre-approval requirement of the Final Judgment by not obtaining pre-approval of a
written communication published via Twitter on February 19, 2019. Dkt. Nos. 18, 30.
5. On April 5, 2019, the Court held oral argument and ordered the parties to meet
and confer for at least one hour in an effort to resolve the Commission’s contempt motion and
consider modifications to the Court’s Final Judgment and Tesla’s Senior Executives
6. Attorneys for the Commission, Defendant, and the General Counsel of Tesla met
and conferred, and the parties have reached an agreement to resolve the Commission’s pending
contempt motion and modify the Court’s Final Judgment in this case, as well as the Final
Judgment in the related case of SEC v. Tesla, Inc., 1:18-cv-8947-AJN-GWG. Attached hereto as
Exhibit 1 is the executed Consent of Defendant Musk, setting forth the terms of his agreement
7. Attached hereto as Exhibit 2 is the proposed Order Amending the Final Judgment
(the “Order”) to which Defendant agreed. The proposed Order would replace and supersede
subpart (b) of paragraph IV of the Final Judgment with the following language:
district court’s role is to determine whether the proposed consent judgment is “fair and
reasonable.” SEC v. Citigroup Global Markets, Inc., 752 F.3d 285, 294 (2d Cir. 2014). In this
case, the proposed amendment to the Final Judgment is fair, reasonable, and in the interest of the
parties and investors because the proposed revisions will provide additional clarity regarding the
written communications for which the Defendant is required to obtain pre-approval pursuant to
the Final Judgment. Specifically, the proposed amendment provides that Defendant must seek
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pre-approval of any written communication that contains information regarding a list of specific
topics. 1 This enhanced clarity will reduce the likelihood of future disputes regarding compliance
9. If the Court grants this motion and enters the proposed Order, this will resolve the
For these reasons, the parties respectfully request that the Court approve and enter the
s/ Cheryl L. Crumpton
Cheryl L. Crumpton*
E. Barrett Atwood*
Of counsel:
Erin E. Schneider
Steven Buchholz
Walker S. Newell
1
This list is not intended to be an exhaustive list of topics that may be material for purposes of
the federal securities laws.
Case 1:18-cv-08865-AJN Document 46 Filed 04/26/19 Page 5 of 5
CERTIFICATE OF SERVICE
I certify that on April 26, 2019, a copy of the foregoing was filed through the Court’s
s/ Cheryl L. Crumpton
Counsel for the SEC
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The Securities and Exchange Commission and Defendant Elon Musk having moved and
consented to amend the Final Judgment entered by this Court as to Defendant Elon Musk on
October 16, 2018 (the “Final Judgment”) and for good cause shown:
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain
jurisdiction of this matter for the purposes of enforcing the terms of the Final Judgment, as
Dated:
Hon. Alison J. Nathan
UNITED STATES DISTRICT JUDGE