Sunday 07, October 2018 by Bloomberg

Musk mocks SEC, calls for short-selling to be made illegal

 

Elon Musk insulted the US Securities and Exchange Commission five days after settling a fraud lawsuit brought by the agency, potentially imperilling a settlement that allows him to stay Tesla Inc.’s CEO.

The chief executive officer called the SEC the “Shortseller Enrichment Commission” and chastised the regulator for “doing incredible work” in a tweet late Thursday. Tesla shares dropped as much as 3.1 per cent after the close of regular trading.

The post risks jeopardising a settlement reached Saturday in which Musk, 47, agreed to step down as chairman within 45 days and be replaced with an independent board director. The SEC also hit the billionaire and the electric-car maker each with $20 million fines and is requiring that Tesla implement procedures and controls to oversee Musk’s communications, including his tweets.

“Reading the mind of Elon Musk is beyond my ability, but he is soon to join the SEC in front of a federal judge to defend the recent settlement agreement,” said Stephen Diamond, an associate professor of law at Santa Clara University, who specialises in corporate governance. “If he doesn’t want to put that deal at risk he ought to pay attention to cars instead of Twitter.”

US District Judge Alison Nathan, who must approve the settlements Musk and Tesla agreed to with the SEC, gave both sides until 11 October to explain why the agreements are fair and reasonable.

Tesla representatives didn’t respond to requests for comment. Ryan White, an SEC spokesman, declined to comment.

The SEC accused Musk in a lawsuit a week ago that he misled investors with his infamous tweets on 7 August about having the “funding secured” to take Tesla private. The stock tanked 14 per cent the following day as the agency sought to ban Musk from serving as a company officer. After the settlement reached over the weekend, the shares surged 17 per cent on Monday.

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