Elon Musk Bears The Brunt Of Misleading Tweets, Accused Of Fraud

Randal Sanchez
October 7, 2018

Tesla Inc's Elon Musk on Thursday 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 (sic) that the Shortseller Enrichment Commission is doing incredible work", Musk, a frequent critic of investors betting against the electric vehicle company said in the tweet.

The statement by the electric automaker's CEO alludes to "shortsellers", investors who have bet that Tesla shares will fall and who are frequently the subject of Musk's derision. Musk's Tweets caused his company's stock price to jump more than 6 percent, leading to market disruption, the SEC said.

Musk used his Twitter account to jab the Securities and Exchange Commission, the same agency that went after him for an August 7 tweet in which he declared he had secured financing for a Tesla buyout.

We all know the story by now: Musk suggested on Twitter that Saudi Arabia would be taking Tesla private, sending shares soaring, but changed his mind shortly after, resulting in the SEC filing a lawsuit against Musk saying that he had been manipulating shares.

Telsa board members have proposed 21st Century Fox CEO James Murdoch succeed Elon Musk as chairman.

"It probably doesn't affect the settlement between Musk and the SEC, because it does not deny wrongdoing and does not seem to be material company information", said former SEC enforcement official Alma Angotti, now serving as managing director of risk and compliance at Navigant Consulting, in an email.

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"He'll blame the board for taking him out, or the SEC for derailing his genius", Sonnenfeld said.

The accord must still be approved by a judge and hasn't yet taken effect. The company also has to implement procedures and controls to oversee Musk's communications - including his tweets - and hire a securities counsel.

"I think it is juvenile and sophomoric and narcissistic, but I don't think it has particular relevance to the subject of the lawsuit against him", said Harvey Pitt, the SEC chairman under President George W. Bush.

Both Tesla and the SEC did not respond to requests for comment by FOX Business.

U.S. District Judge Alison Nathan, who must approve the settlement, has given the SEC, Musk and Tesla until October 11 to explain why the terms are fair and reasonable.

Cuban spent about 15 minutes on the phone urging Musk to reconsider his position after Musk rejected the SEC's original settlement offer on September 27 that would have required a $10 million fine and step down as chairman for two years.

Now, the Tesla CEO trolled SEC on Twitter.

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