Posts Tagged "CEO"

Federal prosecutors on Thursday unsealed criminal charges against Federal Savings Bank CEO Stephen Calk, accusing him of corruptly approving high-risk loans to U.S. President Donald Trump’s former campaign chair, Paul Manafort, in exchange for trying to secure a top job in the Trump administration.

The indictment against Calk was issued in New York. It doesn’t name Manafort directly, but Calk’s name repeatedly came up during Manafort’s 2018 financial fraud trial in Virginia in which prosecutors said Calk and Manafort engaged in a scheme to exchange the $16 million US in loan approvals for an administration post.

Calk, 54, faces one count of financial institution bribery, which carries a maximum prison term of 30 years.

Federal Savings Bank, based in Chicago, said in a statement it is a victim of bank fraud perpetrated by Manafort. It added that Calk “has been on a complete leave of absence and has no control over or involvement with the bank,” and the bank is “not a party to the federal criminal case.” It described Calk as its “former chairman.”

Calk could not be immediately reached for comment.

Calk provided Manafort with a ranked wish list of government jobs that he wanted, starting with treasury secretary and followed by other top jobs in the Treasury, Commerce and Defence Departments, prosecutors said. Federal Savings Bank is based in Chicago.

Manafort was one of the first people in Trump’s inner circle to face charges brought by special counsel Robert Mueller as part of his now-completed investigation into Russian interference in the 2016 U.S. election and Trump campaign contacts with Moscow.

Manafort was convicted of bank and tax fraud in the Virginia trial, and pleaded guilty to other charges in Washington. He is now serving a 7½-year sentence in a federal prison in Pennsylvania.

Recommended by Manafort to Kushner

Evidence at the trial included a November 2016 email sent by Manafort to Jared Kushner, Trump’s son-in-law, after Trump won the presidential election. In the email, Manafort recommended three candidates for administration posts, including Calk.

Kushner responded within minutes to Manafort’s recommendations by email: “On it!”

Paul Manafort, seen on April 4, 2018, was convicted later in the year of bank fraud and is now in a federal prison in Pennsylvania. (Andrew Harnik/Associated Press)

The prospect of Calk facing charges emerged in a transcript of a bench discussion during the Manafort trial.

“Mr. Calk is a co-conspirator,” Greg Andres, a prosecutor on Mueller’s team, said during a discussion with the judge at the bench, according to a transcript of the discussion. “And he participated in a conspiracy to defraud the bank.”

“There was an agreement between Mr. Manafort and Mr. Calk to have the loans approved,” Andres said. “They were approved and, in turn, Mr. Manafort proposed Mr. Calk for certain positions within the administration.”

Calk appeared on Fox News and Fox Business News several times in 2016, billed as an economic adviser to Trump.

He reportedly did secure an interview during the Trump administration transition for undersecretary of the army, but was not chosen.

The exchanges between Manafort and Calk caught the attention of House Democrats who sat on that body’s financial services committee in April 2018.

“Although Mr. Calk ultimately was not given a position … reports that he was being considered for a high-level and highly sensitive national security position within the Trump administration as part of a quid pro quo with Mr. Manafort raise serious concerns that, completely apart from special counsel Robert Mueller’s investigation, warrant scrutiny by our Committee,” Democrats Stephen Lynch and Maxine Waters wrote at the time.




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The new government in Alberta wants Enbridge to bring back its proposed Northern Gateway oil pipeline, but the company’s chief executive said there is little chance that will happen.

In the campaign platform of the newly elected UCP government, the party vowed to fight for the re-start of the project, in addition to TransCanada’s Energy East project. TransCanada has already said it has no plans to revisit its project.

On Wednesday, Enbridge’s CEO Al Monaco poured cold water on reviving Northern Gateway.

“I think it’s probably sailed. The first thing you need with something like that is commercial support and I think at this point, just given where the basin is and the other projects that are in the queue, if you will, it would be tough to see that getting re-started at this point,” said Monaco to journalists, after the company’s annual general meeting in Calgary.

Monaco said there would likely need to be an entirely new regulatory process for the project, since so much time has passed since Northern Gateway received its initial approval from the National Energy Board (NEB).

Enbridge’s now defunct proposed Northern Gateway pipeline route for crude oil through northern B.C. (Canadian Press)

The federal government’s proposed Bill C-48 would ban tankers carrying more than 12,500 metric tonnes of oil from docking along B.C.’s north coast, an area that stretches from the northern tip of Vancouver Island to the Alaska border. Experts have said the legislation would make it nearly impossible for Northern Gateway to ever be built.

In early 2015, Enbridge seemed to already be turning away from Northern Gateway since it paid little attention to the project. Enbridge also still had several hurdles to complete before even considering construction, including meeting the 209 conditions issued by the NEB, bringing more indigenous communities onside and securing continued commercial support by oil companies.

The main problem Enbridge faced was its relationship with First Nations along the pipeline route. Although more than half had signed up, many of those who hadn’t were staunchly opposed to the project, even as the company contemplated offering an ownership stake. 

Rulings by B.C.’s Supreme Court and the Federal Court of Appeal were also significant setbacks for the project.

Alberta Premier Jason Kenney wants to fight for all proposed pipeline projects and re-start other projects like Northern Gateway to export oil out of Alberta. (Justin Tang/Canadian Press)

Focus on much smaller projects

On Wednesday, not only did Monaco shoot down the idea of resurrecting Northern Gateway, he also said it’s unlikely the company will build large oil export pipelines of that size again. 

Instead, the company would propose much smaller offshoots from its main pipeline network that would be easier and faster to develop. 

They would be in the size of 50,000 to 300,000 barrels per day, he said, compared to Northern Gateway’s proposed size of 525,000 barrels per day, for instance.

“Ones that can ensure we get through the regulatory process efficiently and in a time frame that makes sense for us to invest,” he said, describing them as expansions compared to large new projects.

If rebuilt, Enbridge’s Line 3 will transport an additional 370,000 b/d of oil compared to current capacity. The pipeline’s original capacity was 760,000 b/d, but was reduced by the company to 390,000 b/d in recent years.


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Boeing Co-Chief Executive Dennis Muilenburg said on Monday the company was making steady progress towards getting approval for new 737 MAX software as he faced shareholders for the first time since two fatal crashes triggered the jet’s grounding.

Battling the biggest crisis of his tenure, Muilenburg was expected to try to bolster confidence in Boeing’s fastest-selling airplane as questions linger over the model’s safety.

Family and friends of 24-year-old American Samya Stumo, one of the victims of the crash of an Ethiopian Airlines 737 MAX on March 10, will hold a silent protest outside the meeting site.

That crash, which killed all 157 on board when it plunged to the ground shortly after takeoff, came five months after a similar Lion Air nose-dive that killed all 189 passengers and crew.

Muilenburg will hold his first press conference since the grounding after the general annual shareholder meeting in Chicago, scheduled for 10:00 a.m. ET on Monday, exactly six months after the Lion Air crash.

Pressure for software fix

Boeing is under pressure to deliver a software fix to prevent erroneous data triggering an anti-stall system called MCAS and a new pilot training package that will convince global regulators, and the flying public, that the aircraft is safe.

Boeing has acknowledged that the accidental firing of the software based on bad sensor data was a common link in the separate chains of events leading to the two accidents.

“We know we can break this link in the chain. It’s our responsibility to eliminate this risk,” Muilenburg said in prepared remarks issued ahead of the shareholder meeting.

The U.S. Federal Aviation Administration could clear Boeing’s 737 MAX jet to fly in late May or the first part of June, two people familiar with the matter said on Friday, though Boeing has yet to submit the updated software and training for review.

Some pilots have warned that draft training proposals do not go far enough to address their concerns.

Meanwhile, deliveries of the 737 MAX, which airlines around the world had been relying on to service a growing air travel industry for years to come, are on hold.

Last week Boeing abandoned its 2019 financial outlook, halted share buybacks and said lowered production due to the 737 MAX grounding had cost it at least $1 billion so far.

Lawsuits from families of victims, shareholders

Shareholders have filed a lawsuit accusing the company of defrauding them by concealing safety deficiencies in the plane. The model is also the target of investigations by U.S. transportation authorities and the Department of Justice.

Muilenburg is Boeing’s chairman and president in addition to CEO, and faces calls that could strip him of one of those titles at Monday’s meeting. Boeing has recommended against the move.

Boeing must also contend with lawsuits filed on behalf of dozens of victims of the two crashes, including the family of Stumo, who are asking whether the Ethiopian disaster could have been prevented after what happened to Lion Air.

“Those in charge of creating and selling this plane did not treat Samya as they would their own daughters,” her mother Nadia Milleron told reporters in early April.

Shares in the company, worth $214 billion, have lost nearly 10 percent of their value since the March 10 crash.


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The Alberta government’s oil production curtailment program will deliver billions of dollars in benefits to taxpayers this year thanks to stronger crude prices, the chief executive of Cenovus Energy Inc. said Wednesday.

Though acknowledging the NDP decision to enforce mandatory production cuts on the oil industry remains “controversial,” CEO Alex Pourbaix maintained Wednesday it was the right decision for the sector and the province.

Pourbaix was one of the most vocal advocates for cuts last fall when pipeline bottlenecks and rising production led to a glut of Alberta crude, steep discounts on regional oil prices and declining government royalties.

Prices for Alberta’s heavy crude have improved significantly since mandatory curtailment was imposed in January by Rachel Notley’s NDP government, which was defeated by the UCP in last week’s provincial election.

In a conference call with analysts on Wednesday, Pourbaix said the production cuts have helped improve the financial situation for his company and the province.

Cenovus reported a profit of $110 million in its first quarter of the year, compared to a loss a year ago.

Pourbaix said the company paid more than $190 million in provincial royalties in the three months that ended March 31. But he said he doesn’t mind because the reduction of price discounting of western Canadian oil has more than made up for the five per cent reduction in Cenovus production the program caused.

When the price situation was at its worst in the fourth quarter of 2018, Cenovus had a net royalty credit from the province, he said.

“Our production accounts for only 10 per cent of total oil production in the province,” Pourbaix said, adding that means the overall royalty benefit to taxpayers over 2019 could be “eight or 10 or even higher billion dollars.”

“If you multiply the net benefits of higher [Western Canadian Select] prices, which are directly related to mandatory curtailment, to our industry’s financial performance and to the province’s royalty take, and you extend those benefits through the rest of the year, it’s crystal clear that temporary mandatory curtailment has been a big win for our industry and for our province.”

UCP should continue curtailments, CEO says

He said that provides a good argument for the new United Conservative government, which takes office next week, to continue its initial support of the initiative.

The province declined comment on Wednesday because of the transition in government.

Jason Kenney reacts last week after the UCP defeated the NDP in the provincial election. Cenovus urged the new United Conservative government, which takes office next week, to continue its initial support of the mandatory oil curtailments. (Chris Wattie/Reuters)

In its quarterly fiscal update in February, however, it almost doubled its estimate of oilsands royalties for the fiscal year ended March 31, 2019, to $3.4 billion from the budgeted $1.8 billion.

The curtailment program which started Jan. 1 was designed to keep 325,000 barrels per day off the market to clear up a glut of oil that had overwhelmed pipeline capacity and lowered prices. It is to fall to about 175,000 bpd by June.

Along with Cenovus, oilsands giant Canadian Natural Resources was among those that supported Notley’s decision to enforce temporary production cuts.

The plan has been opposed by producers with Canadian refining operations such as Suncor Energy Inc. and Imperial Oil Ltd. because lower local oil prices resulted in higher refinery profits.

Husky Energy CEO Rob Peabody has opposed curtailments as an unwelcome interference in the market. (Jeff McIntosh/Canadian Press)

Critics also said the government was unnecessarily wading into the free market and creating long-term investor concerns.

UCP urged to meet with industry over rail contracts

The UCP has indicated it will cancel another NDP plan to add rail assets capable of moving 120,000 bpd of crude starting by the end of the year.

The new government should meet with industry to consider transferring those rail assets rather than simply cancelling the contracts, Pourbaix said later in an interview.

He said it’s vital that rail options are available if curtailments are removed by year-end as scheduled and no new pipeline capacity has been added.

Cenovus is ramping up its own crude-by-rail shipments from between 15,000 and 20,000 bpd in the first quarter to about 100,000 bpd by year-end.

The company reported completing construction of a 50,000-bpd expansion at its Christina Lake thermal oilsands project in the first quarter but said it won’t ramp up production there until curtailment is over and there is progress on getting the oil to market.

Cenovus beat analyst expectations with adjusted first-quarter income of just over $1 billion on revenue of $5 billion, compared with adjusted income of $432 million on revenue of $4.6 billion in the same period of 2018.

The beat was driven by higher oilsands prices and better profits due to lower oil feedstock prices at the two U.S. refineries Cenovus co-owns with operator Phillips 66, analysts said.

It posted a net profit of $110 million, compared with a loss of $654 million a year earlier.

Cenovus reported first-quarter oilsands production of 343,000 barrels per day, down five per cent compared with a year ago, while operating costs rose to $9.06 per barrel compared with $8.78 a year ago.

Production from the company’s Deep Basin assets averaged 104,000 barrels of oil equivalent per day, down 18 per cent from a year ago due to the sale of its Pipestone business, lower capital investment, natural declines and weather-related outages.


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The head of Canadian Pacific Railway Ltd. says heavy snowfall and frigid temperatures cooled the company’s quarterly results, resulting in lower tonnage numbers despite a boost in profits thanks in part to crude-by-rail revenues.

“What happened to us in February, especially in the first two weeks of March, was extraordinary,” chief executive Keith Creel said of the weather.

“Momentum was interrupted. As a result, revenue growth was muted and … expenses increased,” he told investors on a conference call Tuesday.

Creel stressed “one of the toughest … quarters in my experience as well as the company’s,” highlighting its lowest gross ton mileage — an industry metric measuring weight moved per mile — in eight years.

Chief financial officer Nadeem Velani cited “fuel inefficiency due to weather,” and marketing head John Brooks said the ensuing network problems “hindered” grain volumes, though strong pricing allowed revenues to ramp up.

Crude-by-rail helps fuel rising profits

Despite the weather trouble, Canadian Pacific saw profits shoot up last quarter as crude-by-rail revenues increased and fuel costs declined.

Net income rose 25 per cent to $434 million in the quarter ended March 31, compared to $348 million in the same period in 2018, the Calgary-based company said.

Quarterly revenues jumped to $1.77 billion, up six per cent from $1.66 billion last year.

On an adjusted basis, year-over-year diluted earnings per share rose three per cent to $2.79 from $2.70, far short of analyst expectations of $3.01, according to Thomson Reuters Eikon.

Revenues for energy, chemicals and plastics jumped 18 per cent to $315 million amid surging demand from Asian markets in the first quarter.

Grain revenues, which have broken company records recently, rose six per cent to $380 million, and container traffic and coal nudged up three per cent and four per cent to $380 million and $158 million, respectively.

CP Rail’s operating ratio, a key industry metric, hit 69.3 per cent, an increase of 180 basis points compared to last year.


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Canada’s anti-spam law is being used against a former CEO who is accused of using several businesses operating under names such as Teambuy and Dealfind to bombard consumers with emailed discount coupon offers.

The Canadian Radio-television and Telecommunications Commission is seeking $100,000 from Brian Conley for allegedly allowing or ignoring violations of the law while he was president and chief executive officer of nCrowd Inc.

The CRTC says Conley is the first individual to be held liable for violations committed by a corporation. It says nCrowd and several other companies led by him and his associates have ceased activity.

The commission’s staff initiated an investigation in April 2015 following complaints against nCrowd and the related Couch Commerce group of companies.

The federal regulator alleges that the two groups failed to get consent to send the emails, contrary to a Canadian law that was designed to protect consumers from unwanted electronic commercial communications — also known as spam.

Conley has the right to appeal the CRTC’s decision. He couldn’t immediately be reached for comment.


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German prosecutors charged former Volkswagen CEO Martin Winterkorn and four others with fraud in the emissions cheating scandal that has helped turn many Europeans against diesel engines and accelerated the push toward electric cars.

Prosecutors said Monday that Winterkorn knew about the scheme since at least May 2014 and failed to put a stop to it.

That contradicted his claim that he didn’t learn about it until shortly before U.S. investigators announced it in September 2015. Winterkorn resigned as CEO five days later.

VW has admitted installing software in its diesel cars that turned on pollution controls when vehicles were being tested and switched them off during everyday driving. That made it look as if the cars met tough U.S. limits on harmful pollutants known as nitrogen oxides.

In all, some 11 million cars worldwide were equipped with the illegal software.

Deception started in 2006, prosecutors say

Prosecutors said the defendants — all top Volkswagen managers — were part of a deception that started in 2006.

The 71-year-old Winterkorn and the others, whose names were not released, face six months to 10 years in prison if convicted of aggravated fraud involving serious losses. Other charges include unfair competition and breach of trust.

Prosecutors said the defendants could also be forced to forfeit sales bonuses ranging from around 300,000 euros to 11 million euros ($453,000 to $16.6 million Cdn).

Winterkorn is already under indictment in the U.S. on charges of fraud and conspiracy to violate the Clean Air Act and could get up to 20 years in prison. But he cannot be extradited from Germany to the U.S.

Winterkorn’s attorney, Felix Doerr, said that the defence could not comment on the German case because prosecutors had not provided adequate opportunity to review the case files. Doerr said prosecutors turned over seven DVDs with hundreds of file folders of material on April 5.

The case, consisting of a 692-page indictment backed by 300 file volumes holding 75,000 pages, was filed in a local court in Braunschweig on Friday. The court will decide if the case will proceed to trial.

Software update covered up elevated pollution while driving

Prosecutors said among other things that the defendants carried out a software update costing 23 million euros ($35 million) in 2014 to try to cover up the true reason for the elevated pollution during driving.

The prosecutors said they are still investigating 36 more suspects.

Volkswagen’s corporate involvement in the Braunschweig investigation ended last year with a 1 billion euro fine ($1.5 billion). Volkswagen noted that the indictment was against individuals and had no further comment.

The prosecutors’ move is only one of the legal proceedings unleashed by the scandal.

Volkswagen has paid more than 27 billion euros ($41 billion) in fines and civil settlements with authorities and car owners since getting caught.

The automaker apologized and pleaded guilty to criminal charges in the United States, where two executives were sentenced to prison and six others charged, although they could not be extradited.

And the U.S. Securities and Exchange Commission charged the company and Winterkorn on March 15 with defrauding investors through misleading statements about vehicle quality and environmental compliance.

Investors in Germany are also seeking damages.

Diesel sales have sagged

The scandal unleashed widespread scrutiny of diesel emissions across the industry. It soon turned out that many models from other companies also emitted far more pollution on the road than on the test stand, because of regulatory loopholes exploited by carmakers such as turning exhaust controls off at certain temperatures to reduce engine wear.

Diesel sales, once half the European car market, have sagged.

That in turn has undermined carmakers’ plans to use diesels — which get better mileage — to help meet tougher European Union limits in 2021 on emissions of carbon dioxide, the main greenhouse gas blamed for global warming.

One result has been greater pressure to develop battery-powered cars to avoid heavy fines for breaching the new emissions limits. Volkswagen plans to spend 30 billion euros ($45 million) to develop electric vehicles by 2023.

The company was able to weather the scandal well enough to take the top spot as the world’s largest carmaker from Toyota. Last year, under CEO Herbert Diess, Volkswagen had record sales of 10.83 million vehicles, making an operating profit of 13.9 billion euros.


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The former CEO of SNC-Lavalin has lashed out at allegations made by an unnamed company insider, denying taxpayer-backed loans from Canada were ever used to pay bribes under his watch.

“People who talk behind the scenes — they are just chicken,” said Jacques Lamarre in an interview with CBC News. 

CBC News is not naming the SNC-Lavalin insider, who worked on numerous EDC-backed projects, as he fears for his job.

On Wednesday, CBC News reported claims from the insider that it was an “open secret” in the company that money intended for bribes overseas was buried in budgets, disguised as “technical fees” in applications for financing from Export Development Canada

EDC is a Crown agency that provides financial backing and insurance to Canadian companies operating in other countries. Over the past 25 years, EDC has provided up to $4.7 billion in loans to SNC-Lavalin.

The agency says the claim from the insider has prompted it to hire outside legal counsel to review at least one former deal with SNC-Lavalin.

Lamarre was CEO of SNC-Lavalin from the mid-1990’s until 2009. The Quebec business mogul was in charge of thousands of projects — some of which became mired in corruption and bribery allegations, resulting in numerous police investigations and, in 2014, the conviction of the head of the company’s construction division.

He says “technical fees” were often used to hire local staff in foreign countries where it was “very difficult” for SNC-Lavalin to establish operations. According to Lamarre, all contractors were required to sign agreements stating they were not to use money for illegal payments such as bribes or kickbacks.

“It is written in the contract, that they cannot pay bribes. It says it in black and white.”

Lamarre insists paying bribes was not necessary, despite operating in some of the world’s most notoriously corrupt countries.

“No. No. No. For me, I’m not in that business. If we have to pay bribes, I prefer not to bid on that job.”

EDC wants to meet with insider

Export Development Canada has hired outside lawyers to probe allegations from the insider that EDC turned a blind eye to SNC-Lavalin’s abuse of “technical fees.”

Out of the 26 SNC-Lavalin projects EDC has backed since 1995, the agency is reviewing one project in Angola flagged by the insider as involving illicit payments. EDC provided political risk insurance to SNC-Lavalin on a $250-million deal to repair the Matala hydroelectric dam.

“Based on any outcomes of the review, we will carefully examine whether we need to expand the scope,” wrote EDC spokesperson Jessica Draker.

Quebec-based SNC-Lavalin is a construction and engineering giant, with thousands of employees and projects around the world. (Paul Chiasson/Canadian Press)

“We would welcome the opportunity to meet with your source regarding his or her concerns,” Draker added.

It’s unlikely EDC will make its findings public, as the agency says it doesn’t discuss details of its agreements with clients, including how much money SNC-Lavalin currently owes EDC. 

The insider also alleges EDC signed off on SNC-Lavalin’s technical fees, counting them as Canadian expenses, while knowing the payments were destined for foreign contractors.

(EDC requires projects to meet certain “Canadian content” quotas to be eligible for financing, as the agency exists to support Canadian exports).

EDC has not directly answered questions put to it by CBC News about this claim.

SNC-Lavalin, this week, declined to comment.

Former CEO Jacques Lamarre acknowledges the foreign payments were counted as Canadian expenses.

“I have no good answer for that,” Lamarre said, insisting EDC was fully aware of SNC-Lavalin’s budget details.

Criminal case

In recent years, SNC-Lavalin has faced a string of bribery scandals both in Canada and abroad, including corruption allegations tied to EDC-backed projects in India, Angola and Algeria. 

The company is also facing criminal prosecution in Canada for alleged offences in Libya between 2001 and 2011. One company executive has already pleaded guilty to bribery and fraud in connection with contracts in that country. A judge in Montreal will rule next month on whether the Quebec-based engineering giant itself should stand trial.  If convicted, SNC-Lavalin could face a 10-year ban from bidding on federal contracts.

Lamarre says he never knew of — or sanctioned — bribery and says any instances where it occurred were isolated, and the result of lone, corrupt employees.

“We never took any chances. We were always black and white,” Lamarre said. “But on the other hand, I cannot say that with 10,000 projects, [that] once and a while we didn’t have problems.”

The company has been lobbying for a deferred prosecution agreement, which former attorney general Jody Wilson-Raybould opposed.

Prime Minister Justin Trudeau replaced her in January with a new attorney general who could still intervene and impose a settlement that would not bar the company from federal work.

(CBC )


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Elon Musk’s job as Tesla Inc’s chief executive appeared safe on Thursday as a federal judge in Manhattan urged the billionaire to settle contempt allegations by the U.S. Securities and Exchange Commission.

At a hearing in Manhattan federal court, U.S. District Judge Alison Nathan gave both sides two weeks to work out their differences, and said she could rule on whether Musk violated his recent fraud settlement with the regulator if they failed.

Musk declined to comment about the hearing as he left the courthouse, surrounding by reporters, photographers and television cameras.

Nathan had been asked by the SEC to hold Musk in contempt over a Feb. 19 tweet where the regulator said he improperly posted material information about Tesla’s vehicle production outlook without first seeking approval from company lawyers.

The SEC said pre-approval had been a core element of the October 2018 settlement, which resolved a lawsuit over Musk’s tweet last Aug. 7 that he had “funding secured” to take Tesla private at $420 US per share.

That settlement called for Musk to step down as Tesla’s chairman, and levied $20 million civil fines each on Musk and the Palo Alto, California-based company.

Possible drag lifted

Legal experts had said Musk could have faced penalties as severe as removal from Tesla’s board or as chief executive if held in contempt.

But at Thursday’s hearing, the SEC stopped short of recommending such sanctions.

That lifted a potential drag on Tesla’s share price, which recouped some early losses stemming from its Wednesday night report of lower-than-expected vehicle deliveries.

The shares closed down 8.2 per cent, after earlier falling as much as 10.7 per cent.

SEC lawyer Cheryl Crumpton said if Musk were held in contempt, the regulator might ask Nathan to require regular reports about his oversight by Tesla lawyers, including whether they were vetting his statements and if not why.

Noting that Musk had called his $20 million fine “worth it,” she also said higher fines for future violations might be needed to ensure that further backsliding would be “not worth it.”

Crumpton also faulted what she called Tesla’s “troubling” conduct. “Tesla still appears to be unwilling to exercise any meaningful control over the conduct of its CEO,” she said.

The SEC did not accuse Tesla of contempt.

Musk’s lawyer, John Hueston, countered that the “ambiguity” of the settlement made further punishment for his client unfair.

“There simply is not a clear enough standard to use the hard penalty of contempt,” he said.

Musk sat quietly with his lawyers, sometimes staring down at paperwork, during oral arguments.

SEC  calls tweet ‘obviously different’

The battle concerns a tweet that Musk sent to his more than 24 million Twitter followers: “Tesla made 0 cars in 2011, but will make around 500k in 2019,” meaning 500,000 vehicles.

Four hours later, Musk corrected himself, saying annualized production would be “probably around” 500,000 by year end, with full-year deliveries totaling about 400,000.

The SEC called the earlier tweet “obviously different” from Tesla’s Jan. 30 outlook, when it targeted annualized Model 3 production exceeding 500,000 as soon as the fourth quarter, and projected 360,000 to 400,000 vehicle deliveries this year.

Musk’s lawyers countered that the earlier tweet merely restated a forecast he had given on Jan. 30, and that the SEC conceded during settlement talks that Musk did not need pre-approval for all tweets about his company.

Tesla, which built its reputation on luxury cars, has faced several production challenges with its Model 3 sedan, which it is counting on to reach the mass market, recently offering a version starting at $35,000.

On Wednesday night, Tesla repeated its Jan. 30 vehicle delivery forecast, but said first-quarter deliveries had fallen 31 per cent from the prior three months to about 63,000.

Respect for justice system 

The “funding secured” tweet had sent Tesla’s share price up as much as 13.3 per cent. Musk’s privatization plan was at best in an early stage, however, and financing was not in place.

The legal battle has not stopped Musk from being an outspoken critic of the SEC.

Since it began last September, he has labeled the SEC the “Shortseller Enrichment Commission,” recalling his attacks on investors who sell Tesla stock short, and told CBS’s 60 Minutes he did not have respect for the SEC.

And in the early morning of Feb. 26, after the SEC filed its contempt motion, Musk tweeted: “Something is broken with SEC oversight.”

As he prepared to enter the courthouse. Musk told reporters: “I have a great respect for the justice system.”

Asked whether he also respected the SEC, Musk laughed, before turning to go inside.


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The head of SNC-Lavalin says its role as a Canadian global champion will be undermined if the embattled engineering firm is barred from bidding on federal contracts and its local employees are forced to work for foreign competitors.

In an interview with The Canadian Press, Neil Bruce said the Montreal-based company, unlike the Trudeau government, has never cited the protection of 9,000 Canadian jobs as a reason it should be granted a remediation agreement to avoid a criminal trial.

However, he said there’s a public interest for such an agreement, because its well-qualified employees will be forced to work for U.S. or European competitors if it is barred from bidding on federal contracts for a decade.

SNC-Lavalin faces accusations it paid bribes to get government business in Libya — a criminal case that has triggered a political storm and cost Prime Minister Justin Trudeau two cabinet ministers and his most trusted adviser.

Bruce said about 75 per cent of the company’s rivals have concluded deferred prosecution agreements in their host countries and are free to work in Canada.

Meanwhile, Bruce says he still doesn’t know why a federal official and former attorney general Jody Wilson-Raybould were not open to granting a remediation agreement.


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