NEW YORK – A judge told Elon Musk and the Securities and Exchange Commission to try to settle their dispute over a contempt of court request for a controversial tweet by the tech and electric car billionaire – or else.

U.S. District Court Judge Alison Nathan issued a two-week deadline for a resolution following a hearing in which she voiced surprise that SEC lawyers sought the contempt ruling as a first response to Musk's tweet.

"My call to action is for everybody to take a deep breath. Put your reasonableness pants on, and work this out," Nathan told the two sides after the nearly two-hour proceeding.

The judge said she would issue a decision if the two sides fail to resolve their differences.

"Contempt of court is serious business. ... I don't take it likely," said Nathan. "I have serious concerns that no matter what I decide here, this issue won't be resolved."

Musk, who came to the hearing federal court with a smile and sporting a dark suit and a tie, pronounced himself "very happy" with the outcome.

"I'm very impressed with the judge's analysis," he told reporters.

"The tweet in question was true, immaterial to shareholders, and in no way a violation of my agreement with the SEC," Musk added in a statement issued later. "We have always felt that we should be able to work through any disagreements directly with the SEC, rather than prematurely rushing to court. Today, that is exactly what Judge Nathan instructed.”

The SEC argues that Musk's Feb. 19 tweet about the number of cars his Tesla electric vehicle company would make in 2019 violated the terms of a settlement he agreed to in September.

At that time, Musk accepted penalties for using Twitter to proclaim what the SEC concluded were "false and misleading statements" about the prospects of him taking the publicly traded car company private.

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The settlement required the Musk to give up his board chairmanship of the company for three years and pay a non-tax-deductible penalty of $20 million. He also agreed to comply with Tesla procedures requiring him "to seek preapproval of any written communications, including social media posts, that contained or reasonably could contain information material to Tesla or its shareholders."

In the tweet in question, Musk told Twitter followers "Tesla made 0 cars in 2011, but will make around 500k in 2019."

"Musk did not seek or receive preapproval prior to publishing this tweet, which was inaccurate and disseminated to over 24 million people," SEC lawyers argued in their show-cause motion for a contempt of court ruling. "Musk has thus violated the court's final judgment by engaging in the very conduct that the preapproval provision of the final judgment was designed to prevent."

As evidence that Musk and Tesla realized the tweet was problematic, SEC legal briefs cited the follow-up message Musk sent more than four hours later with the help of a securities lawyer for the company.

Musk clarified: "Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k."

During Thursday's hearing, attorneys for the two sides gave competing arguments about whether the initial February tweet violated the agreement.

SEC attorney Cheryl Crumpton argued "it's not even a close call" that the "recklessly tweeted" message to Musk's millions of Twitter followers crossed the legal line.

"Tesla still seems unwilling to exert some sort of control over the tweets of its CEO," she said.

Musk attorney John Hueston countered that the tweet simply added sales gloss to previous car-production statements publicly issued by Tesla. He also insisted that both the billionaire and the company had made a good faith effort to comply with the SEC agreement.

The Wall Street regulator "has not met its legal burden" to show that there was a violation, Hueston told the judge

He noted that both sides and the judge spent much of the hearing debating whether the alleged violation met the legal standard for being "clear and unambiguous" and whether it was "material" to Tesla investors – giving them new and potentially market-moving information.

"It's not clear, and it is ambiguous," Hueston said.

Crumpton for the first time disclosed that the SEC will seek sanctions against Musk if he's found to be in contempt of court. Potential penalties could include periodic reports to the SEC on compliance with the settlement and a series of escalating fines for any future violations.

Musk publicly stated the $20 million fine imposed by the original settlement was "worth it," Crumpton said as she suggested that future fines should by "not worth it."

Instead of wielding "a hammer on the head of Mr. Musk," Hueston said both sides should negotiate a new settlement that resolves all ambiguities in the SEC oversight of the billionaire's social media communications.

"If there is an action, that's what the action should be here, your honor," said Hueston.

This article originally appeared on USA TODAY: Judge tells Elon Musk, SEC to try to settle dispute over contempt of court request