Tesla (TSLA) - Get Report CEO Elon Musk has reached a preliminary settlement with the Securities and Exchange Commission in a contempt case filed over his use of Twitter (TWTR) - Get Report to disseminate material information about the electric car maker.
Under a consent agreement filed Friday, Musk agreed to changes in the original settlement reached with the commission last fall.
Musk first fell afoul of the agency last year over his erroneous tweets that he had found financial backing to take Tesla private at $420 a share.
The SEC charged Musk with contempt of court following a tweet in February saying Tesla would produce 500,000 cars this year. He later tweeted that the company would be producing cars at a rate of 500,000 per year by the end of this year.
Under the consent order Friday, Musk agreed to "obtain the pre-approval of an experienced securities lawyer employed by the Company of any written communication" on a long list of topics. The list includes the company's financial position, any potential mergers or acquisitions, and production numbers or sales delivery numbers.
The settlement agreement, which still must be approved by the judge in the case, covers communications "made in any format, including but not limited to, posts on social media (e.g.Twitter)."
Anton Wahlman, a contributor to TheStreet who is short Tesla, said the settlement was "lame and weak." He noted there are no provisions to monitor Musk's compliance with the deal, and no further financial penalties. (As part of the initial settlement last fall, Musk had to pay a fine of $20 million. Tesla also paid a $20 million fine under the original settlement.)
Wahlman said Friday's settlement might be worth a 2% "relief rally" in the stock.
Tesla shares fell 5% Friday on continued disappointment over the company's earnings report earlier this week. It was the stock's lowest close since January, 2017.