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Tesla's Elon Musk enters Manhattan courthouse in showdown with SEC

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Tesla CEO Elon Musk just squared off with the SEC in court

Tesla CEO Elon Musk said he respected the U.S. judicial process, but chuckled when asked if he felt the same about the Securities and Exchange Commission as he entered a courthouse Thursday for a showdown with the federal agency.

Musk was in New York for a hearing on contempt charges requested by the SEC after it said he violated the terms of its October settlement over securities fraud. Musk tweeted about the company's production forecasts on Feb 19, despite agreeing to stop using Twitter to make statements about Tesla's operations or financial position without company review and approval.

Tesla CEO Elon Musk arrives at federal court, April 4, 2019 in New York City. A federal judge will hear oral arguments this afternoon in a lawsuit brought by the U.S. Securities and Exchange Commission (SEC) that seeks to hold Musk in contempt for violating a settlement deal.
Drew Angerer | Getty Images

"I have great respect for the justice system and I think the judges in the American system are outstanding," Musk told reporters before entering the courthouse in lower Manhattan.

When CNBC's Phil LeBeau asked Musk if he felt the same about the SEC, the CEO laughed and walked away.

Securities lawyers and other industry executives have said that Musk, who has already been removed as chairman, could also lose his post as CEO over his latest skirmish with the SEC.

Elon Musk, chief executive officer of Tesla Inc., center, arrives at federal court in New York, on Thursday, April 4, 2019.
Jeenah Moon | Bloomberg | Getty Images

"The court and SEC are in a bit of a bind here because capital punishment, if you will, would be ... throwing him out of company or banning him from running any public company from now on for violating this agreement with the SEC," Paul Ingrassia, Revs Institute for Automotive Research editor, said on CNBC's "The Exchange" on Thursday. "He is viewed as being the essence of Tesla. It's his brainchild. He's not only the public figure but also the creative genius behind it."

Tesla's shares plunged by more than 10% Thursday before recovering slightly to close down 8.2% after the company released its production and delivery data for the first quarter that missed Wall Street estimates and disappointed investors.

"At some point I think people have to start wondering would this company be better off with a calmer managerial presence in charge as opposed to a genius leader but a mercurial leader," Ingrassia said. "Is the company now at that stage of its development? But Musk has so much of the shares himself that that's probably not going to happen without an SEC or court order, which I doubt they'll be willing to do."

— CNBC's Michelle Fox contributed to this article.

Watch: What investors should watch ahead of Musk's faceoff with the SEC

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Here's what Tesla investors should watch ahead of Elon Musk's faceoff with the SEC this week
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Mad Money

Cramer: Charts show why Tesla's stock could be set to rebound

Key Points
  • "The charts, as interpreted by Bob Moreno, say that it's time to buy this [Tesla] stock. He thinks Tesla has limited downside and substantial upside at these levels," CNBC's Jim Cramer says.
  • "If Tesla can cross [a certain] threshold, Moreno is betting the stock will fill in the big gap from January and climb to the $340s ... nearly 20 percent up from where it's currently trading," the "Mad Money" host says.
  • "My view, this is a high-risk situation. It's too risky for me, but Moreno's got a great track record. He needs to be taken seriously," he says.