Elon Musk calls SEC ‘broken’ in new Twitter spat
BENGALURU: Silicon Valley billionaire Elon Musk laid into the US Securities and Exchange Commission (SEC) again on Tuesday, after it accused the Tesla Inc. chief executive officer (CEO) of violating the terms of a settlement last year of fraud charges against him.
In a filing on Monday, the SEC said that in a tweet on February 19 Musk had broken a promise made last year to have his public statements vetted by the company’s board, part of the deal.
The regulator did not say what remedy it wanted the court to impose, but the commitment was part of a settlement that headed off demands from the SEC for Musk to resign as Tesla CEO, seen by investors in the company as a substantial risk to its future.
Musk, who initially on Monday accused the SEC of failing to read the company’s annual reports, followed up with another tweet in the early hours of Tuesday.
“Something is broken with SEC oversight,” he wrote.
“With Tesla/musk settling with the SEC in October this black cloud was in the rear view mirror for the company,” analysts from brokerage Wedbush said in a note to clients.
“This latest tweet (is) a wild card that could potentially bring this tornado of uncertainty back into the Tesla story until resolved.”
JP Morgan Securities analyst Ryan Brinkman said that in a worst case scenario, the SEC could again seek Musk’s removal as CEO for violating the terms of the agreement and its shares could fall by a fifth, or more than $50, in value.