Tesla shareholder suit over Elon Musk tweets remains on hold

DOVER, Del. (AP) — A Delaware judge has denied a request by attorneys for Tesla shareholders to pursue a lawsuit seeking to prevent CEO Elon Musk from using his personal Twitter account to disseminate information regarding the electric vehicle and solar panel manufacturer.

Vice Chancellor Joseph Slights III ruled Tuesday that shareholder attorneys had not demonstrated a sufficient reason for him to allow the state court lawsuit to proceed. Slights put the case on hold after it was filed last year because of a pending federal securities fraud lawsuit and a contempt motion against Musk by the Securities and Exchange Commission.

The SEC sought to hold Musk in contempt of court after he tweeted in February 2019 about Tesla’s vehicle production goal for the year. Regulators said the tweet violated a 2018 securities fraud settlement requiring Tesla to oversee tweets from Musk that could affect the company’s stock. The settlement was reached after the SEC sued Musk for using his Twitter account to falsely announce that he had secured financing to take Tesla private.

The contempt motion was resolved in April 2019 with a requirement that Musk get approval in advance from a company lawyer before issuing any written communications regarding Tesla’s finances. But Musk got in more hot water last July after sending an unapproved tweet regarding a forecast for his company’s solar roof panel production.

The Delaware plaintiffs said in a court filing earlier this month that the lawsuit should proceed because Musk’s continued tweeting poses an imminent threat to Tesla, and that Tesla’s board has failed to rein in Musk and enforce the pre-approval policy on his communications.

The “final straw,” they said, was a May 1 tweet in which Musk said he though Tesla’s stock price was too high. The share price promptly fell...