Fraud Lawsuit Could Ban Elon Musk From Running Tesla
Elon Musk has been accused of fraud in a lawsuit that could see him banned from being the boss of Tesla – or any other publicly-traded company.
The huge and deeply serious move by the Securities and Exchange Commission (SEC) is in response to Musk’s tweets in August, in which he claimed to have secured funding to take Tesla private again.
The SEC claims that Musk hadn’t even talked about such a deal, let alone agreed terms with any sources of funding. The tweets caused massive volatility of Tesla’s share price and, so the SEC is arguing, harmed investors. The group is now looking to try to place an order on Musk, who also heads SpaceX, to prevent him from leading any company publicly listed on a stock exchange.
Reports within the SEC’s papers, filed in federal court in New York yesterday, show that senior Tesla staff – including the firm’s head of investor relations – had emailed Musk’s chief of staff in astonishment, asking if the tweets were ‘legit’.
At the time the Nasdaq platform actually halted trading because of the confusion thrown up in the wake of Musk’s social media comments. Musk himself, however, has responded by saying that the SEC’s actions were “unjustified” and that he acted in the “best interests of truth, transparency and investors.”
This latest heap of trouble for the beleaguered engineer comes after he had twice accused a British cave diver who had helped rescue a trapped Thai youth football team from flooded caves of being a child abuser.
Earlier this month he smoked marijuana on a live webcast with comedian Joe Rogan. His vulnerability – and volatility – were also on show in a worrying New York Times interview, where he confessed to working 120-hour weeks and taking sedatives.
Meanwhile, Tesla backers have become increasingly frustrated at the electric car giant’s apparent inability to solve production and delivery scale woes for the Model 3 or improve quality control for the Model X.
Comments
Musk always seems like an intelligant man, but he’s not controlling himself well in puplic.
Ouef
I’ll be honest here. If Elon gets kicked out, I’m sure Tesla will be better. Elon is a too busy man. And Teslas #2 (forgot his name, you can look up) is known as a guy who singlehandedly got the first Model S out of the production problems and delivered it to the customers. He is known with his HC multi-tasking (doing a phone call, writing a spreadsheet and reading an e-mail). He usually works 16-18 hours on a daily basis. He is also a guy that managed to engineer and figure out how to build and additional production line for the Model 3.
I belive that guy can do Tesla better. He also seems more down to earth.
Let’s be clear,
Nobody single handedly does anything in this business.
He may well have played a key role, but he did not do anything alone.
It takes a village.
This seems like a bit of an overreaction over one tweet, but I don’t think Musk is fit to run Tesla anyway. He’s a dreamer, not a businessman.
Actually I belive there was a meeting two months before the tweet. They talked about Musk staying the CEO or choosing someone else. This could be the last straw
Well it’s Elon Musk after all
$420 eh?
I think it was a business move that fired the wrong way and all his social media tweets wich should help his company actually worsend the state of his company
Finally!!!!!!
Oh man that sucks
SEC is just going nuclear because they want to force him to settle, i doubt he will settle as he had chance to win this.
“The SEC claims that Musk habt even talked about such a deal”
Your comment there is misleading, The SEC did acknowledge preliminary talks with the company and UAE, the big issue here is his use of “funding secured”.
SEC is trying to claim malicious intention, they will need to prove it.
Musk is refuting that claim and as long as he can prove that he can win this lawsuit.
From the New York Times
“The complaint notes that Mr. Musk had discussions in late July with a foreign investment fund that had recently acquired a 5 percent stake in Tesla. In those discussions, Mr. Musk said he was thinking about taking Tesla private, but regulators said nothing formal was agreed on.”
Guess we gon find out, dont particularly like how tesla is run but I feel like elon has been contemplating stepping down for a while