Stories
Slash Boxes
Comments

SoylentNews is people

posted by martyb on Friday September 28 2018, @08:16AM   Printer-friendly
from the lawsuit-secured dept.

Elon Musk Accused by SEC of Misleading Investors in August Tweet

Tesla Inc. Chief Executive Officer Elon Musk was accused by the Securities and Exchange Commission of misleading investors when he tweeted that he had funding lined up to take the company private.

The agency said Musk fabricated the claim in his August tweet, which sent Tesla shares higher.

"In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source," the SEC said in complaint filed Thursday in Manhattan federal court, less than two months after Musk's tweet.

The suit seeks an order from a judge barring Musk from serving as an officer or director of a public company, a request often made in SEC lawsuits, as well as unspecified monetary penalties.

Shares fell about 10 percent in after-hour trading on news of the lawsuit. The company, which wasn't sued, and an attorney for Musk didn't immediately respond to requests for comment. The SEC has scheduled a press conference for 5 p.m.

The complaint: 1:18-cv-8865 (alt source).

Current (delayed) stock quote: TSLA.

Also at the BBC, TechCrunch, Bloomberg, c|net, and Ars Technica.

[Update: added 20180928_141312 UTC]

The CNBC is reporting Tesla's Musk pulled the plug on a settlement with the SEC at the last minute:

Tesla and the Securities and Exchange Commission were very close to a no-guilt settlement Thursday, reported CNBC's Andrew Ross Sorkin on Friday, citing sources. But, these people say Musk pulled out of the agreement at the last minute.

Under the terms of the deal, Musk and Tesla would have had to pay a nominal fine, and he would not have had to admit any guilt. However, the settlement would have barred Musk as chairman for two years and would require Tesla to appoint two new independent directors, reported CNBC's David Faber, citing sources.

Musk reportedly refused to sign the deal because he felt that by settling he would not be truthful to himself, and he wouldn't have been able to live with the idea that he agreed to accept a settlement and any blemish associated with that, the sources said.

Tesla was not immediately available for comment.

Musk said Thursday the SEC's allegations are "unjustified" and that he acted in the best interests of investors.


Original Submission

 
This discussion has been archived. No new comments can be posted.
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
  • (Score: 3, Informative) by All Your Lawn Are Belong To Us on Friday September 28 2018, @02:58PM (7 children)

    by All Your Lawn Are Belong To Us (6553) on Friday September 28 2018, @02:58PM (#741355) Journal

    Not hard.

    Tesla makes the announcement on a Friday (i think....)
    Next trading day stock jumps 10% higher. While correlation ain't causation, I don't know anybody seriously arguing that it wasn't Tesla's tweet that did that.

    So you have Tesla's high price at $354.98 on August 6 from a $345 start, an average price of on August 7 of $387.48 (people paid a bunch more for Tesla stock thinking it would be worth $420 - it only takes one trader) on a $343 start, and it has been sliding down ever since but by August 8 a high of $382 on a start of $369. (And it's been sliding ever since...)

    So no, the official story that an investor believed what Musk tweeted as fact, acted on it in a rush and lost because Musk was lying, is far more plausible than a conspiracy theory with no factual evidence.

    --
    This sig for rent.
    Starting Score:    1  point
    Moderation   +1  
       Informative=1, Total=1
    Extra 'Informative' Modifier   0  
    Karma-Bonus Modifier   +1  

    Total Score:   3  
  • (Score: 2) by All Your Lawn Are Belong To Us on Friday September 28 2018, @03:28PM

    by All Your Lawn Are Belong To Us (6553) on Friday September 28 2018, @03:28PM (#741373) Journal

    Musk's announcement and tweet, sorry. (Musk is Tesla CEO, so it's not entirely wrong to suggest "Tesla" tweeted it... who doesn't think of them as one and the same? - the whole point of why it's an SEC enforceable problem anyway.) And it was a Tuesday, not a Friday, my bad.

    But the point still holds.

    --
    This sig for rent.
  • (Score: 0) by Anonymous Coward on Friday September 28 2018, @03:39PM (4 children)

    by Anonymous Coward on Friday September 28 2018, @03:39PM (#741376)

    "I don't know anybody seriously arguing that it wasn't Tesla's tweet that did that."

    A gain in stock price, isn't a loss. In fact increasing the stocks value is the CEO's job. And if the stock has been sliding since then so what? Fluctuations are normal. Crashes are engineered.
     

    • (Score: 2) by bob_super on Friday September 28 2018, @05:17PM (1 child)

      by bob_super (1357) on Friday September 28 2018, @05:17PM (#741428)

      > A gain in stock price, isn't a loss.

      It'a loss if you're shorting. Shorts add no value, but they are still "holding". Now, that's not actionable, but that makes them angry, and they have money to pay lawyers to retaliate.

      > In fact increasing the stocks value is the CEO's job.

      Indeed, but with hyperbolic statements and unicornic powerpoints. Not with technically incorrect tweets.

      > And if the stock has been sliding since then so what? Fluctuations are normal.

      Shorts want it to slide, and they accept the fluctuations and occasional losses/gain. But many had to rush to liquidate to avoid getting trapped by a sudden 20% rise and privatization. Lost a lot. Find someone else to blame. Unleash lawyers/SEC.

      • (Score: 0) by Anonymous Coward on Saturday September 29 2018, @04:25PM

        by Anonymous Coward on Saturday September 29 2018, @04:25PM (#741836)

        "Now, that's not actionable"

        Note that while you and I acknowledge that, almost every mainstream reporter did not. And in most cases the were slinging wild insinuations that this is in fact actionable. So they were really just astroturfing for the brokers who were telling everybody to short. And that itself IS actionable. What the chop shops were doing here was effectively a reverse pump and dump.

        "Not with technically incorrect tweets"

        Given the length limitation, I would say that "technically correct tweet" is an oxymoron. Any other medium would have allowed at least a modicum of scope in the communication. Without context, almost any statement is mostly meaningless.

    • (Score: 2) by All Your Lawn Are Belong To Us on Friday September 28 2018, @11:06PM (1 child)

      by All Your Lawn Are Belong To Us (6553) on Friday September 28 2018, @11:06PM (#741590) Journal

      Causing gains by lies is not a CEO's job. Spin that how you like it's still true - causing an unwarranted gain in the stock is still not legal.

      The point being anyone who bought stock on Musk's comment bought into a lie by Musk, and that is prosecutable.

      --
      This sig for rent.
      • (Score: 0) by Anonymous Coward on Saturday September 29 2018, @04:31PM

        by Anonymous Coward on Saturday September 29 2018, @04:31PM (#741840)

        "Causing gains by lies is not a CEO's job"

        Clearly you've never worked for a big corporation.

  • (Score: 0) by Anonymous Coward on Friday September 28 2018, @03:47PM

    by Anonymous Coward on Friday September 28 2018, @03:47PM (#741379)

    "acted on it in a rush and lost because Musk was lying"

    If you acted on it in a rush, then your a speculator, not an investor. Really there should be different rules for day traders. If 50% of your portfolio is held less than 6 months, you should get less protection. The SEC shouldn't be in the vegas-backrooming business.