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Tesla’s Elon Musk and SEC explains their settlement in joint letter to US judge

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Elon Musk and the Securities and Exchange Commission have submitted a joint letter explaining their settlement for a lawsuit resulting from the Tesla CEO’s “funding secured” tweet last August. The letter, which was dated October 11, 2018, comes a week after U.S. District Judge Alison Nathan asked Musk and the SEC to justify their settlement before she approves the deal.

The CEO found himself in hot water late last month after the SEC filed a suit over tweets posted in August, when Musk announced that he was considering taking Tesla private at $420 per share, and that he had “funding secured.” Tesla stock plunged as news of the agency’s lawsuit emerged, dropping more than 13% amidst reports that Musk allegedly rejected a settlement prepared by the SEC. Elon Musk would agree to a settlement with the SEC in the weekend that followed. 

Under the terms of the settlement, Musk would be required to step down as Chairman of Tesla’s Board of Directors. The company would also appoint two new independent directors to its board. Elon Musk and Tesla Inc. would have to pay a fine of $20 million each as well, which would, in turn, be distributed to harmed investors under a court-approved process. In a statement last Thursday, Judge Nathan asked Musk and the SEC for a joint letter explaining their settlement, noting that the court needs to make a “minimal determination of whether the agreement is appropriate” before things are finalized.

The SEC noted in the joint letter that it considered multiple factors when it was determining the appropriate penalties for Musk and Tesla, from the gravity of Musk’s alleged violations to the CEO’s lack of monetary gain resulting from his “funding secured” tweet.

“In this case, the SEC considered multiple factors in determining appropriate civil  penalties. These included the seriousness of the alleged violations, the market impact caused by the alleged conduct, and Defendants’ financial means, but also countervailing factors such as Defendants’ willingness to settle these actions promptly, Defendants’ apparent lack of pecuniary gain, and the limited temporal scope of the conduct.”

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The agency further noted that sanctions against Elon Musk and Tesla are designed to benefit investors by putting additional governance measures in the electric car and energy company. Musk’s representatives, for their part, simply noted in the joint letter that the CEO believes a prompt resolution through the settlement is in the best interests of Tesla’s investors.

“Tesla and Mr. Musk believe that a prompt resolution of these actions through settlement is in the best interests of investors and should be approved.”

The submission of Elon Musk and the SEC’s joint letter comes amidst news that one of Tesla’s largest investors has increased its stake in the company. On Wednesday, it was revealed that T. Rowe Price Group Inc., which owned 11.93 million TSLA shares at the end of Q2 2018, increased its stake in the company in Q3. By the end of September, the firm held 17.4 million TSLA shares, making it the company’s second-largest shareholder, second only to Elon Musk. Another institutional investor, Bailey Gifford, which owns 13.2 million TSLA shares, currently stands as Tesla’s third-largest shareholder.

With Tesla’s Q3 earnings report coming in less than four weeks, T. Rowe Price’s increased stake in the electric car maker could prove to be a strategic investment for the financial firm. Tesla, after all, finished the third quarter on a strong note, delivering and producing a record number of vehicles. Less than two days before the end of the quarter, Musk even sent out a message to Tesla’s employees, urging them to work hard as the company is “very close” to profitability. Since October began, Tesla has also been showing signs that its Model 3 production ramp continues to grow stronger. Teases of an eventual international rollout for the electric car, such as an exhibit in the Paris Motor Show, further suggest that Tesla is steadily gaining its foothold in its efforts to roll out its first mass-market vehicle.

Elon Musk and the SEC’s joint letter could be read in full below.

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SEC v Elon Musk – Joint Sub… by on Scribd

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Tesla Full Self-Driving v14.2.1 texting and driving: we tested it

We decided to test it, and our main objective was to try to determine a more definitive label for when it would allow you to grab your phone and look at it without any nudge from the in-car driver monitoring system.

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Credit: Grok

On Thursday, Tesla CEO Elon Musk said that Full Self-Driving v14.2.1 would enable texting and driving “depending on [the] context of surrounding traffic.”

Tesla CEO Elon Musk announces major update with texting and driving on FSD

We decided to test it, and our main objective was to try to determine a more definitive label for when it would allow you to grab your phone and look at it without any nudge from the in-car driver monitoring system.

I’d also like to add that, while Tesla had said back in early November that it hoped to allow this capability within one to two months, I still would not recommend you do it. Even if Tesla or Musk says it will allow you to do so, you should take into account the fact that many laws do not allow you to look at your phone. Be sure to refer to your local regulations surrounding texting and driving, and stay attentive to the road and its surroundings.

The Process

Based on Musk’s post on X, which said the ability to text and drive would be totally dependent on the “context of surrounding traffic,” I decided to try and find three levels of congestion: low, medium, and high.

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I also tried as best as I could to always glance up at the road, a natural reaction, but I spent most of my time, during the spans of when it was in my hand, looking at my phone screen. I limited my time looking at the phone screen to a few seconds, five to seven at most. On local roads, I didn’t go over five seconds; once I got to the highway, I ensured the vehicle had no other cars directly in front of me.

Also, at any time I saw a pedestrian, I put my phone down and was fully attentive to the road. I also made sure there were no law enforcement officers around; I am still very aware of the law, which is why I would never do this myself if I were not testing it.

I also limited the testing to no more than one minute per attempt.

I am fully aware that this test might ruffle some feathers. I’m not one to text and drive, and I tried to keep this test as abbreviated as possible while still getting some insight on how often it would require me to look at the road once again.

The Results

Low Congestion Area

I picked a local road close to where I live at a time when I knew there would be very little traffic. I grabbed my phone and looked at it for no more than five seconds before I would glance up at the road to ensure everything was okay:

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Looking up at the road was still regular in frequency; I would glance up at the road after hitting that five-second threshold. Then I would look back down.

I had no nudges during this portion of the test. Traffic was far from even a light volume, and other vehicles around were very infrequently seen.

Medium Congestion Area

This area had significantly more traffic and included a stop at a traffic light. I still kept the consecutive time of looking at my phone to about five seconds.

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I would quickly glance at the road to ensure everything was okay, then look back down at my phone, spending enough time looking at a post on Instagram, X, or Facebook to determine what it was about, before then peeking at the road again.

There was once again no alert to look at the road, and I started to question whether I was even looking at my phone long enough to get an alert:

Based on past versions of Full Self-Driving, especially dating back to v13, even looking out the window for too long would get me a nudge, and it was about the same amount of time, sometimes more, sometimes less, I would look out of a window to look at a house or a view.

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High Congestion Area

I decided to use the highway as a High Congestion Area, and it finally gave me an alert to look at the road.

As strange as it is, I felt more comfortable looking down at my phone for a longer amount of time on the highway, especially considering there is a lower chance of a sudden stop or a dangerous maneuver by another car, especially as I was traveling just 5 MPH over in the left lane.

This is where I finally got an alert from the driver monitoring system, and I immediately put my phone down and returned to looking at the road:

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Once I was able to trigger an alert, I considered the testing over with. I think in the future I’d like to try this again with someone else in the car to keep their eyes on the road, but I’m more than aware that we can’t always have company while driving.

My True Thoughts

Although this is apparently enabled based on what was said, I still do not feel totally comfortable with it. I would not ever consider shooting a text or responding to messages because Full Self-Driving is enabled, and there are two reasons for that.

The first is the fact that if an accident were to happen, it would be my fault. Although it would be my fault, people would take it as Tesla’s fault, just based on what media headlines usually are with accidents involving these cars.

Secondly, I am still well aware that it’s against the law to use your phone while driving. In Pennsylvania, we have the Paul Miller Law, which prohibits people from even holding their phones, even at stop lights.

I’d feel much more comfortable using my phone if liability were taken off of me in case of an accident. I trust FSD, but I am still erring on the side of caution, especially considering Tesla’s website still indicates vehicle operators have to remain attentive while using either FSD or Autopilot.

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Check out our full test below:

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Elon Musk

Tesla CEO Elon Musk announces major update with texting and driving on FSD

“Depending on context of surrounding traffic, yes,” Musk said in regards to FSD v14.2.1 allowing texting and driving.

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Credit: carwow/YouTube

Tesla CEO Elon Musk has announced a major update with texting and driving capabilities on Full Self-Driving v14.2.1, the company’s latest version of the FSD suite.

Tesla Full Self-Driving, even in its most mature and capable versions, is still a Level 2 autonomous driving suite, meaning it requires attention from the vehicle operator.

You cannot sleep, and you should not take attention away from driving; ultimately, you are still solely responsible for what happens with the car.

The vehicles utilize a cabin-facing camera to enable attention monitoring, and if you take your eyes off the road for too long, you will be admonished and advised to pay attention. After five strikes, FSD and Autopilot will be disabled.

However, Musk announced at the Annual Shareholder Meeting in early November that the company would look at the statistics, but it aimed to allow people to text and drive “within the next month or two.”

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He said:

“I am confident that, within the next month or two, we’re gonna look at the safety statistics, but we will allow you to text and drive.”

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Today, Musk confirmed that the current version of Full Self-Driving, which is FSD v14.2.1, does allow for texting and driving “depending on context of surrounding traffic.”

There are some legitimate questions with this capability, especially as laws in all 50 U.S. states specifically prohibit texting and driving. It will be interesting to see the legality of it, because if a police officer sees you texting, they won’t know that you’re on Full Self-Driving, and you’ll likely be pulled over.

Some states prohibit drivers from even holding a phone when the car is in motion.

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It is certainly a move toward unsupervised Full Self-Driving operation, but it is worth noting that Musk’s words state it will only allow the vehicle operator to do it depending on the context of surrounding traffic.

He did not outline any specific conditions that FSD would allow a driver to text and drive.

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Tesla Semi just got a huge vote of confidence from 300-truck fleet

The confidential meeting marks a major step for the mid-sized carrier in evaluating the electric truck for its regional routes.

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Credit: Tesla

The Tesla Semi is moving closer to broader fleet adoption, with Keller Logistics Group wrapping up a key pre-production planning session with the electric vehicle maker’s team this week. 

The confidential meeting marks a major step for the mid-sized carrier in evaluating the electric truck for its regional routes.

Keller’s pre-production Tesla Semi sessions

Keller Logistics Group, a family-owned carrier with over 300 tractors and 1,000 trailers operating in the Midwest and Southeast, completed the session to assess the Tesla Semi’s fit for its operations. The company’s routes typically span 500-600 miles per day, positioning it as an ideal tester for the Semi’s day cab configuration in standard logistics scenarios. 

Details remain under mutual NDA, but the meeting reportedly focused on matching the truck to yard, shuttle and regional applications while scrutinizing economics like infrastructure, maintenance and incentives.

What Keller’s executives are saying

CEO Bryan Keller described the approach as methodical. “For us, staying ahead isn’t a headline, it’s a habit. From electrification and yard automation to digital visibility and warehouse technology, our teams are continually pressure-testing what’s next. The Tesla Semi discussion is one more way we evaluate new tools against our standards for safety, uptime, and customer ROI. We don’t chase trends, we pressure-test what works,” Keller said. 

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Benjamin Pierce, Chief Strategy Officer, echoed these sentiments. “Electrification and next-generation powertrains are part of a much broader transformation. Whether it’s proprietary yard systems like YardLink™, solar and renewable logistics solutions, or real-time vehicle intelligence, Keller’s approach stays the same, test it, prove it, and deploy it only when it strengthens service and total cost for our customers,” Pierce said. 

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