Elon Musk faces a possible suspension from his position as Tesla’s CEO after Securities and Exchange Commission lawyers say he violated a settlement with the SEC.
Musk was ousted as Tesla chairman and paid a $20 million fine in September after the SEC filed a lawsuit against him claiming he misled investors in a series of tweets published on August 7. In the tweets, Musk said he secured funding to take Tesla private. Tesla at the time also agreed to pay a $20 million fine for failing to vet Musk’s communications with the public, including on Twitter.
The SEC says Musk’s recent tweets regarding Tesla’s production forecasts for the Model 3 are a violation of the September settlement, which required Tesla to vet his communications, CNBC reports.
“It is looking pretty ominous for Musk,” Elliot Lutzker, a former attorney in the SEC’s enforcement division, told CNBC. “I could very easily see a very significant fine and a possible suspension.”
One of the company’s major investors said Wednesday that the company would be just fine without Musk as CEO. In an interview with Barron’s, James Anderson who heads global equities for Baillie Gifford, said, “We wouldn’t be against him having a different role. I don’t think he needs to be CEO.” The Baillie Gifford investment firm owns 7.7% of Tesla shares.
Musk and Tesla will have until March 11 to respond to a request from a judge explaining why he should not be held in contempt of court over the alleged violation of the SEC settlement.
Tesla did not immediately respond to Fortune for comment. The SEC declined to comment.