Tesla sued over Elon Musk's Twitter poll about selling shares

  • 20/12/2021
A close-up of a Tesla car
The billionaire has already faced legal ramifications for other social media posts. Photo credit: Getty Images

Tesla has been hit by a new lawsuit over CEO Elon Musk's social media posts, including the Twitter poll where he asked followers to vote on whether he should sell 10 percent of his stock.

The electric vehicle (EV) manufacturer is being asked to supply the records relating to the controversial billionaire's tweets by Tesla investor David Wagner, who filed suit in the Delaware Court of Chancery.

That includes any documents as to whether the tweets regarding stock had been reviewed and pre-approved by the company.

In 2018, Musk agreed to have public statements about the company checked by its lawyers as part of an agreement with the US Securities and Exchange Commission (SEC).

It has sued both Tesla and the CEO after it alleged Musk's tweet about taking the company private was fraudulent.

Both parties had to pay the SEC US$20 million in fines, with the billionaire also having to resign as Tesla chairman and not stand for re-election to the position for three years.

Questions over whether Musk's tweets are actively being pre-approved have been brought up at least twice by the SEC since the 2018 case.

The Wall Street Journal reported earlier this year the commission had written to the company in both 2019 and 2020 to ask why the procedure wasn't being followed.

Steven Buchholz, a senior SEC official, said Tesla was failing to "enforce these procedures and controls despite repeated violations by Mr Musk".

"Tesla has abdicated the duties required of it by the court's order."

Musk has also faced criticism for other tweets this year, including a reply to US Senator Bernie Sanders, who was demanding the "extremely wealthy" pay their fair share of taxes.

"I keep forgetting that you're still alive," Musk wrote.

Tesla is also facing a US$162.2 million lawsuit from JPMorgan Chase who have accused the company of "flagrantly" breaching a contract over financial warrants.

Since the Twitter poll about stock shares, Musk has sold around US$14 billion worth of his holdings, according to Reuters.