Elon Musk's lawyers accuse SEC of 'unprecedented over-reach'

Elon Musk’s lawyers accused the Securities and Exchange Commission late on Monday of “unprecedented over-reach” and said the regulator was infringing on the Tesla boss's first amendment rights by seeking to hold him in contempt of court.

Musk denied violating a previous settlement with the SEC in a 33-page court filing on Monday evening and his lawyers urged the court to not give in to the “unconstitutional power grab” from the regulator.

The previous settlement required Musk to obtain pre-approval from lawyers before sending out any tweets concerning Tesla after he said he had secured funding for a buyout of Tesla, which later turned out to be false.

The SEC accused Musk of sending out a tweet on 19 February published outside trading hours regarding figures of Tesla’s car production which he later had to amend.

Musk’s attorneys argued that he had the right to make his own determination about whether his tweets contained material information and that those in question complied with the settlement terms.

They also added that the CEO had “dramatically reduced his volume of tweets generally and regarding Tesla in particular.”

“This self-censorship is reflective of his commitment to adhering to the Order and avoiding unnecessary disputes with the SEC," they said in the filing.

The news comes as Tesla makes a U-turn on its plans to close stores to make the company more profitable and sell the new Model 3 sedan for $35,000.

The company announced on Monday it would keep stores open and would instead raise prices of other car models by around 3%.