Elon Musk will be sued by the SEC for fraud
The Securities and Exchange Commission (SEC) is accusing Elon Musk of fraud. In a suit filed Thursday, the government watchdog pointed to the Tesla CEO’s infamous 7 August tweet as an example of providing misleading information to influence stock prices.
The SEC challenged many aspects of the tweet, from the $420 price being an admitted reference to weed in order to impress Musk’s girlfriend, to the dubious assertion of secured funding and the fact he didn’t run the tweet past any members of his legal team before posting.
Several weeks after the Tweet Musk backtracked on his statement, leaving little to show of the company’s brief dalliance with privacy, save a 10% increase in Tesla share prices after the tweet.
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If the suit is successful, Musk will be barred from running any public company registered by the SEC including, but not limited to, Tesla. After the suit was filed, Tesla stocks dropped 12%, an ironic outcome for a suit intended to challenge the artificial influencing of stock prices.
In a statement Musk called the SEC’s action “unjustified”, saying “I have always taken action in the best interests of truth, transparency and investors”. This is an additional piece of irony, given that the man planned to create a website on which he’d rank “press reliability”.
Musk is no stranger to being sued, nor is innocent of tweeting his mind on a variety of topics, (see his candy empire, his thoughts on Google cameras, or him taunting Boeing) but it is up to the SEC to decide if his “Tesla private” tweet was intentional fraud or just another another rich person running their mouth on Twitter.