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posted by martyb on Sunday September 30 2018, @12:09PM   Printer-friendly
from the make-stupid-tweet-pay-stupid-fine dept.

Tesla and CEO Elon Musk will pay $40 million to settle SEC case

Tesla and Chief Executive Elon Musk have settled a Securities and Exchange Commission lawsuit that alleged the outspoken businessman misled investors about his prospective effort to take the electric-car company private.

Musk and the Palo Alto company agreed to pay a total of $40 million, and he will give up his chairmanship for at least three years. Musk, however, will remain chief executive and retain a seat on the company's board of directors. Tesla, meanwhile, is required to install an independent chairman and add two new board members, according to terms of the settlement, which the SEC announced Saturday.

Musk and Tesla will each pay $20 million to settle the case; both reached the deal without admitting wrongdoing. The company declined to comment.

The SEC charged Musk with fraud Thursday, alleging that his tweets about taking Tesla private — at $420 a share — were "false and misleading." As part of the lawsuit, it asked a federal court to remove him from the company's leadership and ban him from running a public company.

Also at Reuters.

SEC Settlement announcement.

Previously: Elon Musk Considers Taking Tesla Private
Elon Musk Accused by SEC of Misleading Investors in August Tweet [Updated]


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  • (Score: 1, Insightful) by Anonymous Coward on Sunday September 30 2018, @12:22PM (12 children)

    by Anonymous Coward on Sunday September 30 2018, @12:22PM (#742059)

    $20 million???? Now you know why most CEOs speak like brain-dead animatronics.

    There must be a lot of people at the SEC shorting Tesla.

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  • (Score: 0, Insightful) by Anonymous Coward on Sunday September 30 2018, @12:25PM (6 children)

    by Anonymous Coward on Sunday September 30 2018, @12:25PM (#742062)

    Nobody ever asks "Who exactly is getting paid?" If it's a settlement with the SEC, then I suppose it's going into the coffers of the SEC.

    Great. Government facilitates another transfer of wealth from people who create wealth to a bunch of a paper-pushing, know-nothing Vogons.

    • (Score: 4, Interesting) by Blymie on Sunday September 30 2018, @12:34PM (4 children)

      by Blymie (4020) on Sunday September 30 2018, @12:34PM (#742066)

      Amusingly, it's almost a plus for Musk. The guy's overworked as it is. Now he has one less job, but retains day-to-day regardless.

      $40 million is nothing. Tesla has billions in the bank, so does Musk.

      "had $2.2 billion in cash on hand at the end of the second quarter," -- refers to Tesla in the article above.

      I'm sure he's going to stack the board with people he can trust, and an independent? Sure, independent now -- but he still gets to decide *who*.

      • (Score: 1, Insightful) by Anonymous Coward on Sunday September 30 2018, @03:04PM (3 children)

        by Anonymous Coward on Sunday September 30 2018, @03:04PM (#742089)

        This stupid rhetoric needs to die.

        It doesn't matter that Tesla/Musk have a lot more where that came from. It's still the case that $20 million represents a shitload of possibilities, and those possibilities are now not in the hands of creative, wealth-producing people like Musk and the people of Tesla, but rather in the hands of... whom exactly? Nobody interesting, that's for fucking sure.

        • (Score: 5, Insightful) by JoeMerchant on Sunday September 30 2018, @04:23PM

          by JoeMerchant (3937) on Sunday September 30 2018, @04:23PM (#742105)

          those possibilities are now not in the hands of creative, wealth-producing people like Musk and the people of Tesla

          Looks to me like those possibilities just left the hands of a blabbermouth who can't appropriately filter his materially significant musings from his public announcements. It might slow him down enough to focus his creative energies on something besides frothing up the markets who hang on his every word to attempt to speculate future movements. If I worked for Musk and I "leaked" news like that to the press, I'd be hanged, drawn and quartered by the SEC - or at least as near as they could come. Those same rules also apply to the man doing the waffling, just as much as his minions who are charged with keeping confidential information confidential until it is at a state suitable for public announcement.

          --
          🌻🌻 [google.com]
        • (Score: 0, Troll) by Anonymous Coward on Sunday September 30 2018, @05:05PM

          by Anonymous Coward on Sunday September 30 2018, @05:05PM (#742117)

          Do you understand why we have traffic tickets? Why some people go to jail?

          Of course you don't, you are a brain dead Vogon, errr what is the Earth term again? Oh ya, Libertarian. Evolve already.

        • (Score: 5, Interesting) by bzipitidoo on Sunday September 30 2018, @05:41PM

          by bzipitidoo (4388) on Sunday September 30 2018, @05:41PM (#742127) Journal

          Having hung out with the rich for a while, I'd say about a quarter of the rich are total assholes, and another quarter are feeble minded enough to go along with their asshole peers. Another quarter are not so bad, actually have hearts, but they also have this "White Man's Burden" complex that has them thinking the rest of us are a bunch of helpless babies. Ironic that many of the rich are the helpless ones, like dogs helpless to stop eating as long as there's more dog food within reach. You can't let them have all the food they want or they'll eat themselves to death.

          It's all a game to the assholes, and they think they're super killer winner predators. Just look at Trump for an example. They do not appreciate or care to know who gets hurt when they pull off another heist and steal another fortune through a bit of insider trading, or by bribing lawmakers to pass yet another tax cut for them, or cut them a sweetheart deal. At heart, they're petty little corrupt weasels, and they enjoy corrupting others into being no better than them, and breaking rules and getting away with it. They're great at rationalizing, saying contemptuous crap like that the little people are morons who would just waste the money anyway. Musk is an exception, but even people like him are not immune to the corruption. Some kind of punishment is not only just, but necessary to remind him and his rich peers that they are not above the law. He made a mistake, and it's best for everyone that he not get away with it.

          And you worship them as "creative wealth-producing people"?? THAT is why America is going to the dogs. That attitude is way too generous and blind to their faults. Is it your life ambition to be a rich man's poodle?

    • (Score: 3, Insightful) by Anonymous Coward on Sunday September 30 2018, @01:12PM

      by Anonymous Coward on Sunday September 30 2018, @01:12PM (#742071)
      I think part of the fine was a voluntary payment in exchange for not having to listen to Vogon poetry.
  • (Score: 2) by theluggage on Sunday September 30 2018, @03:19PM (1 child)

    by theluggage (1797) on Sunday September 30 2018, @03:19PM (#742090)

    $20 million???? Now you know why most CEOs speak like brain-dead animatronics.

    Yes, because they understand that when you enjoy that kind of status and influence, your words have consequences... and there's no point fining a company CEO $100 + $25 victims compensation surcharge when one year of their annual compensation would be enough for a mere mortal to retire on (even though they probably filed a loss on their tax return...)

    Even if this is all some conspiracy by Tesla-shorting lizard people*, Musk handed them a knife and painted a bullseye between his shoulder blades.

    (*Who are terrified that Musk might make it to Mars and find the set where they really faked the Moon landings)

    • (Score: 3, Informative) by JoeMerchant on Sunday September 30 2018, @04:35PM

      by JoeMerchant (3937) on Sunday September 30 2018, @04:35PM (#742109)

      one year of their annual compensation would be enough for a mere mortal to retire on

      47 years old, worth $20B - let's assume he started "earning" money around 18, that's 666 million per year.

      Satanic numerology coincidences aside, mere mortals can retire at 50 with around $1.25M saved [howstuffworks.com], so mere mortals can retire quite comfortably on a single day of Musk's average compensation.

      --
      🌻🌻 [google.com]
  • (Score: 4, Informative) by JoeMerchant on Sunday September 30 2018, @04:16PM (2 children)

    by JoeMerchant (3937) on Sunday September 30 2018, @04:16PM (#742103)

    Yes, that's ludicrous, $20M is 0.1% of Musk's net worth and less than 0.05% of Tesla's market cap.

    An equivalent fine for a "middle class" 47 year old in great financial shape with a little put away in IRAs, say $500K net worth, would be a $500, basically two speeding tickets. And remember: that 0.1% fine would hit the middle class harder because they might actually use that money for something noticeable some day before they die like food, clothing, shelter, or even travel expense.

    The whole situation is ludicrous, and the reason it was settled in this way is even more ludicrous: because the plaintiff's demonstrated means and will to pursue the case in a manner which would have cost Musk/Tesla more than $40M to defend it, even if he won.

    --
    🌻🌻 [google.com]
    • (Score: 4, Informative) by zocalo on Sunday September 30 2018, @04:41PM (1 child)

      by zocalo (302) on Sunday September 30 2018, @04:41PM (#742110)
      Agreed, it's a slap on the wrist fine. However, and perhaps I'm giving the SEC more credit than due here, perhaps they thought that Tesla without Musk might implode and wanted to try and ensure that didn't happen. Are members of the SEC investigating a company allowed to have shares in that company or have an obligation to think of the employeess, because this sure isn't a ruling that would have been made by someone shorting Tesla?

      Either way, the Tesla board now gets to appoint an "independent" Chairman on a three year contract, then as that term comes up they and Musk can decide whether or not to shuffle things around, which could potentially include returning to how things are now. If Teslas' current board are generally OK with how Musk is running the company then it seems pretty likely they are going to just appoint someone who feels pretty much the same way, so it'll probably end up being business as usual. If not, so what? Musk currently owns more shares than any other institution or individual (~33 million, or about 20% of the total, compared to CTO Jeff Straubel in 2nd place with just ~635,000), so it's highly likely he'll gets to decide how any board votes are going to go anyway.
      --
      UNIX? They're not even circumcised! Savages!
      • (Score: 0) by Anonymous Coward on Sunday September 30 2018, @06:19PM

        by Anonymous Coward on Sunday September 30 2018, @06:19PM (#742134)

        wanted to try and ensure that didn't happen.

        Try to do what?