Late on Monday it emerged the Securities and Exchange Commission (SEC) asked a federal court in NY to hold Mr Musk in contempt for violating a 40 million-dollar (£30m) settlement he reached with the United States stock market's chief regulatory agency five months ago.
The request from regulators in a court filing Monday sent the carmaker's stock plummeting more than 4% after hours.
Musk did not seek or receive pre-approval prior to publishing this tweet, which was inaccurate and disseminated to over 24 million people.
About four hours later, a correction popped up: "Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week".
Musk initially contended that he hadn't done anything wrong before reluctantly agreeing to have future tweets that could affect Tesla's stock be pre-approved.
This is the latest event in a long-running battle between Musk and the SEC.
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Most important Tesla's policy required Musk to "re‐confirm the pre‐approval" if more than two days have passed since the original approval was granted-and the settlement required Musk to follow the policy.
Musk's first tweet on February 19 was not pre-approved, the SEC discovered and outlined in its filing with the court.
Tesla's stock slides on news that the SEC wants contempt charges filed against CEO Musk.
This included a clause that Musk had to seek Tesla's pre-approval of any written communications, including social media posts, that would be relevant to the company or its shareholders.
In its defense, Tesla lawyers said Musk was trying to "recapitulate" a pre-approved statement from the company's earnings call, stating that the company would get production to 10,000 vehicles a week by the end of the year, according to the attorneys' February 22 letter to the SEC included in court filings Monday. However, in December he revealed on the US edition of 60 Minutes that that nobody is approving his tweets.
Now that the SEC thinks Musk isn't playing by the rules of the settlement, it's asked the judge in its case against Musk to hold him in contempt. "Who knows? ... Nobody's flawless". I do not respect the SEC.
"While Musk claims to 'respect the justice system, ' his deliberate indifference to compliance with this court's final judgment indicates otherwise", the agency said.