Elon Musk Can Remain Tesla CEO but Must Step Aside as Chairman in SEC Settlement

Discussion in 'Wall St. News' started by ajacobson, Sep 29, 2018.

  1. ajacobson

    ajacobson


    September 29, 2018









    Elon Musk Can Remain Tesla CEO but Must Step Aside as Chairman in SEC Settlement
    The company and Musk also have agreed to pay a $40 million fine


    By
    Tim Higgins
    Updated Sept. 29, 2018 6:03 p.m. ET

    Elon Musk has reached a settlement with the Securities and Exchange Commission that allows him to stay on as chief executive of Tesla Inc. TSLA -13.90% but requires that he step aside from the chairman role for three years.

    The surprising twist, announced by the SEC on Saturday, comes after he rejected a settlement on Thursday and appeared to be hunkering down to fight a lawsuit by the agency. The SEC alleged he misled investors with Twitter messages on Aug. 7 that claimed the company had funding in place to take the auto maker private. A person familiar with his thinking said on Friday that he believed he could win in court against the SEC.



    Instead, on Saturday, the SEC announced that Mr. Musk had settled the lawsuit that sought to ban him from running publicly traded companies. He agreed to step down as chairman and remain ineligible to be re-elected to that position for three years.


    Tesla has agreed to appoint two new independent board members, establish a new committee of directors and create controls to oversee Mr. Musk’s communications, according to the SEC.

    Mr. Musk and Tesla each agreed to pay a fine of $20 million.
     
    dealmaker likes this.
  2. Cuddles

    Cuddles

    ridiculously tepid
     
  3. newwurldmn

    newwurldmn

    He should have been banned. He’s only getting away with it because he’s Elon. The only thing more anti-SEC’s intent is if he told his buddies he was going to spread rumors so they could front run it.
     
    Cuddles likes this.
  4. No, he's getting away with it because everyone involved has done the opportunity cost calculation. The SEC gets $40 million for its slush fund and Elon gets to keep doing whatever he wants, generally. It's a clean, smart decision.
     
  5. Ditto.

    With Musk's wealth (mostly garned from tax payers)..such a fine is mere pocket lint.
     
  6. dealmaker

    dealmaker

  7. vanv0029

    vanv0029

    Even worse I think the whole point to Musk's refusing the SEC settlement
    last week then accepting it over the weekend was to cause shorts who held their
    position to lose money. I think $420 buyout with financing in place tweet had the
    same motivation. TSLA's problem is that it needs to raise capital. If there are
    aggressive shorts, TSLA common will really tank and cause TSLA to lose its
    shares ability to buy things. SEC is brainless.
     
    Cuddles and elitenapper like this.
  8. The SEC has never been known for its brains.

    Here's my theory / speculation:

    The SEC was under pressure from large institutional holders to go light and lenient on Elon Musk so as to provide a window of exit so they may dump the stock without suffering massive losses.

    The real law enforcement will be done by the DOJ with its criminal charges to be filed after a reasonable amount of time has passed for reasonably diligent investors to either exit the stock completely or choose to remain invested knowing the risks involved. Of course, the SEC may come back on other issues that are still under investigation.

    The window may last a few weeks to a few months.

    The question is whether Tesla will last long enough in light of its production hell, delivery logistics hell, and risks of a January default.
     
    Last edited: Oct 1, 2018
  9. tomorton

    tomorton

    There's not much gain by taking one of the country's most successful entrepreneurs out of the game. He has received some restrictions but he can basically carry on his business. Meanwhile, anyone wishing to invest in him sees a large red flag over his name, so they're not unable to invest, but caveat emptor.
     
  10. tomorton

    tomorton

    Not that i would so much as lend him my car keys.
     
    #10     Oct 1, 2018