Elon Musk: ‘I do not respect the SEC’
Tesla chief’s comments raise questions about effectiveness of deal
Tesla chief executive Elon Musk says he does not respect the U.S. Securities and Exchange Commission, the federal agency that sued him this year for allegedly misleading investors, compelling him to pay a $20-million (U.S.) fine as part of a settlement and to step down as company chair.
In an interview with 60 Minutes that aired on Sunday, Musk said he was abiding by the agreement out of respect for the justice system, not because he sees eye to eye with federal securities reg- ulators. “I do not respect the SEC. I do not respect them,” he said.
Musk also spoke about two key changes to the company — Tesla’s policy to more closely monitor his Twitter posts and the appointment of a new chair — which may raise questions about the effectiveness of the settlement.
Musk said that none of his tweets have been censored since the SEC deal and that Tesla does not read all of his Twitter posts before he shares them to his more than 23 million followers.
Tesla has agreed to review Musk’s written statements, including on Twitter, that could contain material information.
That condition was designed to prevent the kind of scandal that shook markets in August, after Musk announced on Twitter that he was planning to take the company private and that he had already secured the money to close the deal. Just days later, Musk suddenly reversed on his plans to go private, leading Tesla stock to plunge, and leading the SEC to charge him with fraud.
But in the interview, Musk said that not
all of his tweets are approved by handlers ahead of time.
“The only tweets that would have to be, say, reviewed, would be if a tweet had a probability of causing a movement in the stock,” Musk said. When asked how Tesla would know if a tweet contained material information without reading it first, he replied, “Well, I guess we might make some mistakes. “Who knows?” Some corporate governance experts have highlighted what they described as weaknesses in the SEC’s settlement, primarily the fact that Musk did not have to admit guilt, and the absence of stronger requirements to change the makeup of the board, where Musk retains significant power.
Musk is Tesla’s largest shareholder, with a roughly 20 per cent stake in the company. He oversees the all-electric carmaker’s development, engineering and design.
Musk may have bolstered the view of those critics with his remarks on his hand-picked replacement on the board, chair Robyn Denholm.
Musk said “it’s not realistic” to see Denholm as watching over him, because of his large shareholder stake.
“It’s not realistic in the sense that I am the largest shareholder in the company,” Musk said during the interview.
“And I can just call for a shareholder vote and get anything done that I want.”