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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.
(Score: 2) by All Your Lawn Are Belong To Us on Friday September 28 2018, @05:28PM (1 child)
BTW, I reread and got that you got that bit about the 8K already -- didn't reread your parent and wanted to get the link to the actual 8K as well. But I do know you're capable of reading parent posts. ;)
Again, you're right, though that it is a waste. It should be an object lesson to all large publicly-held companies that they should be VERY careful in designating official channels of communication and who has those rights (including the CEO). (And Governments and their officials for that matter).
I wonder how much actual thought Elon Musk put into that tweet.... was it really just an off the cuff feeling?
This sig for rent.
(Score: 2) by RS3 on Friday September 28 2018, @06:19PM
Thanks for a great discussion. I agree on all points. As I've mentioned elsewhere on SN, and gotten downmodded (??), I'm a bit of a freedom of speech advocate. But for freedom of speech to work, listeners have to be less reactionary, and that's all I'm saying. I don't read twitter at all, other than tweets quoted somewhere in the news, but I've seen enough to know it's like Joe's blog, or someone's online journal. I guess I'm a bit surprised that a tweet has so much power. In fact, one of the only twitter accounts I glanced at a few times was "boredelonmusk". To me it all just seems like the homeless person talking to themselves. So to answer your question, I tend to think Musk didn't think about how seriously it would be taken, and I blame it on his horribly sleep-deprived state, and now it seems that some 420 could have been involved, so I'll call it an "off the puff feeling". (Popeye laughing sounds...)