Musk was in federal court in NY for a hearing on charges of contempt requested by the SEC, the chief Wall Street regulator, which argued that Musk violated an October 2018 settle over securities fraud when he tweeted inaccurate production forecasts on February 19, 2019 despite agreeing to stop using Twitter to make statements about Tesla without the company's approval.
Elson believes regulators are now obligated to take meaningful action or the settlement with Tesla or any future agreement the SEC reaches with any company in the future reaches will be rendered meaningless.
The hearing comes as Tesla shares slump after it disclosed that vehicle shipments have fallen 31 percent.
Under the agreement hashed out past year, Musk was supposed to stop tweeting about Tesla's business without a lawyer's approval.
Crumpton also argued that Musk has incorrectly argued he only needs pre-approval if he tweets something that could "move markets".
"Tesla would have to deliver at least 100,000 cars each quarter, for the next three quarters".
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A lawyer for the SEC told the court that Musk should face substantial escalating fines if he keeps violating a deal with the agency.
Nathan had been asked to hold Musk in contempt over a February 19 tweet, where the SEC said he improperly posted material information about Tesla's vehicle production outlook without first seeking approval from its lawyers.
Electric vehicle pioneer Tesla announced its first quarter delivery numbers last night - and the news is not good.
This failure to meet expectations caused a sharp drop in stock price, RBC analyst Joseph Spak even suggested that the delivery figure failure could "translate into a ~$1bn+ revenue miss".
Tesla did, however, commit to its full-year guidance of delivering between 360,000 and 400,000 vehicles in 2019.
Musk, whose attorneys were set to appear in federal court Thursday as the Securities and Exchange Commission tries to persuade a judge to hold him in contempt over unauthorized tweets, alluded to the delivery problems in the company's last quarterly earnings call, Tesla noted. Tesla said it delivered 63,000 vehicles in the first quarter, nearly one-third less than in early 2018.