NEW YORK (Reuters) – Tesla Inc Chief Executive Elon Musk should be subjected to greater oversight and the potential for additional fines if he is held in contempt for violating his recent fraud settlement with the U.S. Securities and Exchange Commission, a lawyer for the regulator said at a Thursday court hearing.

But the lawyer, Cheryl Crumpton, did not recommend that Musk face possible removal from Tesla’s board or as chief executive if held in contempt, lifting a possible drag on Tesla’s share price.

Tesla shares recouped some of their earlier losses after Crumpton spoke, and were down 7.3 percent in mid-afternoon trading.

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Crumpton spoke at a hearing before U.S. District Judge Alison Nathan in Manhattan.

The judge is considering whether Musk should be held in contempt over a Feb. 19 tweet, where the SEC said he improperly posted material information about Tesla’s vehicle production outlook without first seeking approval from company lawyers.

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

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