A federal judge gave Elon Musk and the Securities and Exchange Commission two weeks to resolve a dispute about whether Musk had violated a settlement he reached with the commission in October and should be held in contempt of court.

Judge Alison J. Nathan of U.S. District Court in Manhattan told both sides to put “their reasonableness pants on” after a 90-minute hearing attended by Musk, chief executive of electric car company Tesla.

In Round 2 of the battle between the SEC and Musk, the question for the judge came down to whether the voluble entrepreneur’s Twitter post Feb. 19 about Tesla’s production figures violated the terms of the October settlement.

In the post, Musk said Tesla would produce about 500,000 cars in 2019. A month earlier, the company had said it would sell 360,000 to 400,000 cars this year.

The SEC contends the settlement required Musk to get approval from a Tesla lawyer before publishing any Twitter posts that include potentially market-sensitive information. Lawyers for Musk have countered the message did not contain material information.

Musk’s legal team has argued that the post was in line with earlier statements by the chief executive about the potential demand for the company’s cars.


Musk did not speak during the hearing. But after court, surrounded by a crowd of reporters, he said, “I feel very much loved,” before getting into the back seat of a Tesla and being driven away.

The October settlement arose from a civil fraud complaint the SEC filed against Musk and Tesla for a Twitter post in which he said he had “funding secured” to take the company private at $420 a share. It turned out that the plan to take the company private was not nearly as far along as Musk had suggested.

Under the settlement, Tesla was required to establish procedures to oversee and preapprove Musk’s written communications, including Twitter posts, that might have material information about the company.

The settlement forced Musk to step down as chairman of Tesla and pay a $20 million fine. The company paid the same fine.

In his wrangling with the SEC, Musk has shown open disdain for the agency. Just days after reaching the settlement, Musk taunted regulators on Twitter, calling the commission the Short-seller Enrichment Commission. In an interview with CBS News program “60 Minutes,” Musk said he did not respect the regulator.