Tesla’s Elon Musk mocks SEC as judge demands they justify fraud settlement
NEW YORK: Tesla Inc’s Elon Musk mocked the US Securities and Exchange Commission, just hours after a federal judge ordered him and the regulator to justify their securities fraud settlement, which let Musk remain chief executive.
“Just want to that the Shortseller Enrichment Commission is doing incredible work,” Musk, a frequent critic of investors betting against the electric car company, wrote on Twitter. “And the name change is so on point!”
The tweet came five days after Musk settled SEC charges that he misled investors in tweets on Aug 7, including that there was ‘ funding secured’ to take his Palo Alto, California-based company private at US$ 420 per share.
Musk agreed to pay a US$ 20 million fine, and step aside as Tesla’s chairman for three years, to settle charges that could have forced his exit from Tesla.
The company also accepted a US$ 20 million fine, despite not being charged with fraud. Tesla and the SEC declined requests for comment. Former SEC lawyers questioned the wisdom of Musk’s latest tweet, but said it was unlikely to jeopardise the settlement, which prevents Musk from denying wrongdoing or suggesting that the regulator’s allegations were untrue.
“I don’t think the SEC would look at this as a denial of the facts alleged,” said Peter Henning, a law professor at Wayne State University in Detroit. “But you don’t take gratuitous shots at the SEC. There’s no real upside.”
Shares of Tesla closed down US$ 12.97, or 4.4 per cent, at US$ 281.83, and fell another 2.1 per cent to US$ 276 following Musk’s tweet after market hours. — Reuters