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Judge orders Elon Musk to meet with the SEC 'for at least one hour'

Apr 5, 2019, 21:07 IST

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Tesla Inc. CEO Elon Musk exits after attending for an S.E.C. hearing at the Manhattan Federal Courthouse in New York, April 4, 2019.REUTERS/Eduardo Munoz

Tesla CEO Elon Musk will be forced to meet with federal regulators to decide what he can and cannot tweet, a judge has ruled.

The latest order, filed by Judge Alison Nathan on Friday, follows a high-profile hearing on Thursday in which Musk's lawyers and SEC prosecutors took turns sparring over what constitutes a material disclosure on social media.

"For the reasons stated on the record at oral argument yesterday, the parties are required to meet and confer for at least one hour in an effort to resolve the pending motion to hold Mr. Musk in contempt," her order said. "As well as any modifications to the consent judgment and Tesla's Senior Executives Communications Policy."

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

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In September, Musk and the SEC agreed as part of a $20 million settlement to have some of the billionaire's communications reviewed by in-house lawyers. The SEC asked Judge Nathan in February to find Musk in contempt of court for allegedly violating that agreement by tweeting 2019 production numbers that differed from the company's official filings.

Elon Musk told reporters after the hearing Thursday that he was pleased with Judge Nathan's decision.

"I have great respect for Judge Nathan, and I'm pleased with her decision today," he said in a statement distributed by Tesla. "The tweet in question was true, immaterial to shareholders, and in no way a violation of my agreement with the SEC. We have always felt that we should be able to work through any disagreements directly with the SEC, rather than prematurely rushing to court.  Today, that is exactly what Judge Nathan instructed."

Musk and the SEC will be required to submit a joint letter "no later than April 18, 2019" outlining their agreement. If no agreement is reached, the court will issue a decision on the SEC's motion to find Musk in contempt, the order said.

Shares of Tesla rose about 1.8% in trading Friday following Thursday's hearing. You can read Business Insider's minute-by-minute breakdown of the courtroom proceedings here.

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SEC vs Musk - Judge orders parties to meet by Graham on Scribd

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