On Sept. 27, the Securities and Exchange Commision (SEC) sued, CEO of Tesla Motors, Elon Musk for securities fraud due to announcing fallacious public statements on Twitter.
Along with being the lead designer and CEO of SpaceX and co-founder of PayPal and Neuralink, Musk’s net worth amounts to 19.5 billion dollars since 2018 and will continue to grow with the advancements in each Tesla model.
On August 7, Musk tweeted, “[I] am considering taking Tesla private at $420. Secured funding.”
This announcement sparked concerns from the SEC. SEC alleges that this tweet harms investors who bought Tesla stock after the tweet was made because information about the funding has yet to be made public.
The complaint stated that Musk did meet with the Saudi Arabia’s Public Investment Fund to discuss taking Tesla private, however nothing was written to paper.
After his tweet, Tesla Motors and its board of directors announced, “[We] are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful US auto company in over a century.”
However, there are many who believe otherwise. One of Musk’s short sellers and critics, Mark Spiegel commences SEC for taking legal action against Musk in a case that he believed would be easy to prove.
Spiegel told Times, “Musk has a very long history of easily proven lies. This is just the first one he is being held accountable for.”
With Musk having over 22 million followers on Twitter, his tweet could harm the company and possibly bring him down from his position as CEO.
The SEC asks that Musk must make up for his wrongdoings and be forbidden from having any position with Tesla Motor’s securities. They also want Musk to be removed from his position as chief executive officer. Nevertheless, Musk refuses to admit that he has done anything wrong.
“This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of the truth, transparency and investors,” Musk told Buzzfeed. “Integrity is the most important value in my life and the facts will show I never compromised this in any way.”
A professor at Stanford Law School and former SEC administrator, Joseph Grundfest, proposes that Musk has supervision from what he puts on the internet. He also stated that the SEC might face difficulties in disciplining Musk without affecting the other shareholders.
Grundfest told Times, “He is not going to be able to remain as CEO with no conditions. That is not on the table.”