UPDATE 2: Board Comments: SEC Lists Tesla CEO Elon Musk As Defendant In Lawsuit

SEP 27 2018 BY ERIC LOVEDAY 441

The Securities and Exchange Commision has formally listed Tesla CEO Elon Musk as a defendant in a lawsuit.

The Securities and Exchange Commission filed the lawsuit on Thursday over what appears to be alleged securities fraud, likely tied to Musk’s “taking Tesla private” claim and/or secured funding claims.

Neither the SEC nor Tesla/Musk can comment on this due to it now being an open, official lawsuit.

***UPDATE: Scratch that. Musk commented to CNBC:

“This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

***UPDATE 2: Tesla board comments. See embedded Tweets below:

We’ve embedded the entire document on this developing story directly below:

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441 Comments on "UPDATE 2: Board Comments: SEC Lists Tesla CEO Elon Musk As Defendant In Lawsuit"

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Spoonman.

So if successful, this would prevent him from being an officer or director of Tesla or any other public company. Am I reading that right?

(⌐■_■) Trollnonymous

I’m sure some monetary punitive dollar value will be attached.

Either way, when he meets the criteria outlined in his job tasks by the shareholders (I think it’s the shareholders), He’ll be a filthy rich dude still.

Spoonman.

If he is smart he’ll settle and delete his Twitter account.

(⌐■_■) Trollnonymous

+1

Taylor Marks

His Twitter account is more valuable than his being CEO of Tesla.

Plus that’d do more to punish Twitter than anyone else. Musk can just start putting content on x.com and I think a lot of people will stop using Twitter and just visit that website instead. I’d bet an app with push notifications every time the website is changed is listed on the app store within a week or two of that happening (Because I’ll make it if nobody else does.)

chano1

Well, Hold on. I agree on Twitter freedoms, but nothing can replace his value as CEO. This man is a magician who makes great things happen. Things far beyond the reach or capacity of ordinary Earthfolk. He has his lapses, I agree, but he is a giant among business leaders.

Michael Will

I guess america is on self destruct on all fronts.

pjwood1

When the Wall Street Journal puts Elon Musk and Angelo Mozilo in the same article, let alone sentence, I’m inclined to agree.

William

+1

Derp

He may be a giant among engineers and motivators, but for christ’s sake lets not subscribe to the delusion where Musk is *still* considered a good business leader. After all of this? Come on. He can’t run a company that makes money.

I’m an engineer, I like to move fast and break things first, but he repeatedly takes unnecessary and stupid risks on behalf of employees and shareholders. There was never any room for any of that behavior in a CEO role.

Victor

Derp, I agree with you. I think Elon Musk should resign as CEO of Tesla and spend more time doing some of the things he really enjoys, like drinking alcohol and smoking marijuana.

REXisKing

Victor still got coal?

amt

I Agree That Was Foolish, However it Sounds Like you been Having a Few Yourself…lol…Go ahead One More !

REXisKing

And you’re not a finance major either apparently.
Tesla has had incredible Asset Growth under Musk for 9 Years.
Solid Asset Growth doubling for 9 years.
Musk is a Great Business leader.

John Ray

Apparently, neither are you. There are many hidden liabilities in addition to the enormous ones we can see. Clearly they are understaffed and do not have the infrastructure to handle what they have wrought. All of this under-investment is on clear display now. This lack of infrastructure is a (no longer) hidden liability.

Pushmi-Pullyu

So, how much are you being paid for posting FÜD here? If you’re paid what your comments are worth, then it can’t be much!

Terawatt

Not true. Total assets have barely changed at all for the last four quarters. Nor have total liabilities changed all that much. Combined, net assets have decreased from 4.3 billion to 3.5 over the same period.

https://finance.yahoo.com/quote/TSLA/

Choose “financials” and then “quarterly” to check for yourself.

antrik

These were not unnecessary and stupid risks. These were necessary risks, in order to achieve the enormous growth they are seeing, and that investors are expecting to keep seeing.

Looking at Tesla’s success thus far, it seems he is among the very best in deciding which risks are worth taking.

chano1

Nonsense. Who are you? His grandmother?

Seven Electrics

A settlement was prepared but rejected by Elon at the last minute.

This whole debacle is so ridiculous that I’m left wondering how many other bonehead moves Elon makes behind closed doors, hidden from the public eye. This one just happened to occur on Twitter, where it could be easily observed.

My guess is that it’s in the hundreds, over the years—but when your startup is acquired by PayPal (equivalent to being struck by lightning, or winning the lottery) those funds give you a lot of staying power. It’s better to be lucky than good.

Derp

Man, this comment section is so predictable with the fanboy downvotes! Aye caramba!

bro1999

They sadly likely make up the majority of IEV readers.

Clive

Truth ‼️

antrik

Yes, downvotes for derogatory comments are indeed predictable.

amt

If he is Smart , Which He Is ! ….He Will Fight This & Counter Suit the Shorts for trying to Destroy Tesla , Because MusK., Did N0 Wrong !

Michael

Wrong.

Dan F.

The real monetary damages Mr. Musk faces are from civil actions by injured stock buyers and sellers (shorts and longs) on the day of the tweet and for some days after. These could be in 10 figures (not counting the pennies).

Pushmi-Pullyu

“10 figures”? That would be a high amount for a fine for one individual even if you’re talking Pesos or Rubles or Yen. 🙄

Certainly not billions of dollars! That’s so absurd it’s actually funny.
😆 😆 😆

Doubldutch

Well, the longs could claim that they bought the shares in the expectation that they would receive 420 per share (as Elon claimed it was highly likely), but then lost when the shares headed south. The shorts could claim that they had to settle margin calls when the share price went up initially. The US is a litigious society so as executive you need to be very careful.

He is in trouble and I don’t like that because it will be a setback in Tesla’s mission. No more sleeping on the factory floor – he will be wasting his time with lawyers instead. The best thing he could do now is negotiate a fine without admitting liability. The secod best thing is for him to throw bis phone away and delete hos twitter account.

Pushmi-Pullyu

“…but then lost when the shares headed south.”

I think that’s factually incorrect. I think the stock price actually went up over the period in question. So that would mean they would be suing him on the basis of “Well, we did make money, but we didn’t make as much as we hoped to!”

I would hope that literally every court in the entire country — heck, the entire first world — would laugh that attempt at a suit right out of court, and possibly even fine them for wasting the court’s time. If you sue someone, you have to claim damages of some kind.

antrik

What are you talking about? The shares briefly spiked after the initial tweets (when some investors bought in the expectation that they could likely sell at $420 later), but then took a deep dive they haven’t recovered from yet…

Rolando

The first case of short sellers was about $1.3 billion in losses on Aug-7 alone, shorties are looking for a refund of those burn. Do the math : 1/3 of TSLA stock is shorted, at a stock market capitalization back in August of approx $60 billion this means $20 billion worth of shares are shorted. You can make a lot of money (or lose a lot) when the share price wildly fluctuates from max $387 to intra-day low of $255 (closing $262) after the podcast pot-session.

There are other long investors (including Tesla fanb0ys) who bought at $370-380 in the hope the $420 will materialize and also got burned.

There are Bond holders (the 5.3% subordinated due in 2025) who bought for parity, after the podcast they were down to $81 market price for $100 notional. Today Bloomberg wrote they are 500 bp above coupon (which means in plain English 10.3% yield now). At 7 years until maturity this means 7 years * 5% = 35% loss for Bondholders. Maybe reason for another class action lawsuit ?!

antrik

~$13 billion is the highest figure I have seen regarding short interest in $TSLA.

As for the various losses you cited, while it could be claimed that some are a direct consequence of Musk’s misleading wording, most of them aren’t.

Dan F.

Not at all, the total float in Tesla stock was something like $10 billion (that’s 11 figures) the day of and after the tweet. I think I read that shorts (who are people with legal rights) lost over 1 billion covering their positions during the run up to $380. Ordinary (long position) investors who bought at the post tweet high have had similar losses from the subsequent decline.

BTW, I think Tesla’s cars are impressive and recognize that they are way ahead of the slowly developing competition. Nevertheless, this was a very boneheaded action on Mr. Musk’s part that may well cost him and/or Tesla an amount of money “that’s so absurd it’s actually funny” not.

John Ray

Clearly you don’t understand the difference between a settlement/verdict in a civil suit brought by investors and a fine as part of an enforcement action.

REXisKing

“Am Considering”. Wow. The SEC thinks it has a strong case with “Am considering”?
That’s amazing in itself.
And then to try to take the chairmanship away?
Seems a little disproportionate.

REXisKing

Good time to get a Tesla Cap and Jacket.
Pump up the company pre-Q3.

antrik

It’s the “funding secured” bit they base their case on.

Though considering that apparently he didn’t have trouble lining up willing investors subsequently, and thus lack of funding was clearly not what made the deal fail, I’m not sure how strong a case that really provides…

Doggydogworld

Thee Goldman/Silverlake package was a CYA deal instigated by his lawyers. No way to know if the terms were remotely realistic. Musk called off the go private “effort” two minutes after the dog and pony show.

antrik

Good luck finding evidence for that accusation.

HH

At least read the SEC court filing first, please.

Dan F.

Yes. Possibly the board will remove him from this role before the conclusion of the lawsuit.

Speculawyer

LOL, no, that’s not gonna happen.

R.S

No way that is going to happen. Musk might or might not be the best CEO for Tesla, the board obviously isn’t the best board for Tesla.

You could remove them all and it would virtually make no difference, aside from the balance sheet.

If Musks steps down willingly, it’s because he thinks it’s the right decision. Big investors could put enough pressure on him, or he could realize himself, that people need to focus on Tesla‘s accomplishments, rather than what Musk does right now. And maybe one, or two board members will voice some concerns, but they won’t act.

bro1999

Musk basically controls the board, so no chance in hell of that happening.

Sy Gong Ho

But, if he is not allowed to be the director of a public company, the Tesla board will be truly forced into taking Tesla private. They know they cannot exist without him as the lead. But, if Tesla does go private and does the buyout at, I don’t know, say $420, then the Tweet was correct. So how can they find him guilty if he had a foolproof plan to take the company private?

Dav8or

Why? Is Tesla really that fragile? Is everyone else working there incompetent?

Asak

I’m honestly not convinced at this point that a change of CEO wouldn’t be good for Tesla. I think they need a more nuts and bolts oriented CEO to get production up and production costs under control. Elon Musk is fine as a visionary, but he doesn’t seem to be able to temper his vision by the constraints of reality. Some of his ideas just end up being too big and maybe some are just bad. He needs someone to balance him but as long as he’s on top no one can say otherwise, because he just won’t listen and will instead fire that person (just like the guy who said the production goals were unrealistic).

It’s one thing to shoot for the stars and not be afraid to take on a challenge others believe it’s impossible. But at some point if you take that sort of thinking too far, you just end up shooting yourself in the foot.

Also the guy seems overly stressed out, which is probably the cause of the tweeting that got him in trouble, as well as the whole rescue diver debacle.

dmm1240

Adding on to my comment above, Steve Jobs was ousted because he saw the Macintosh as the only thing that would save the company while John Scully argued just as vehemently that it was a loser and refused to spend any more money on it. They took their argument to the BOD and Jobs was ousted. Professional management, first Scully and then his successor Amelio (sp?) after Scully was fired, brought the company to the doorstep of Chapter 11. Only Jobs’ return from exile saved Apple. Look at it now. I spent my career around big time “professional” managers. I wouldn’t give two nickels for the lot of them. They ain’t all dat, not by a long shot.

Notice how Daimler fired its CEO this week because he didn’t get it on how to go electric? GM, and I believe Ford have fired their CEOs for much the same reason. Why? Those firms’ boards know Tesla will have them by the short and curlies within a decade if they kept schlepping along with their current managers. Without Musk’s innovating like crazy those threatened yesteryear CEOs could breathe a whole lot easier.

R.S

And since Jobs is gone again, Apple is down the drain? As far as I can tell they are doing more than fine!

And Musk isn’t Steve Jobs. He is different, not in a bad, or a good way, but different. And who knows, maybe Apple would have been worse off with Jobs back then?

Also, the market Tesla and Apple were in is different. Apple had different problems. All in all, the premise is totally different.

But I could see Musk, if he steps down, coming back at some point in the future, if Tesla needs to innovate again.

John Ray

You discount what Jobs may have learned from this incident as well as the environment in which Apple operated while he was gone. He had 12 years to observe as an outsider. It is intellectually dishonest to imply that Apple would have thrived had Jobs not been fired.

bro1999

Ousting Musk would cost Tesla in the short term (mainly in investor confidence as far as the company’s ability to fund raise without Musk and of course the Elon cult crowd would Flake out). Though in the long run (assuming Tesla doesn’t go bankrupt) it could be very beneficial, with a CEO installed that actually knew how to properly run an auto company. Drama from the C-suite would probably reduce 99%.

antrik

A CEO who runs Tesla like a traditional car company, at this point in time, is probably about the worst thing that could happen to them.

antrik

A more down-to-earth CEO wouldn’t be better at getting production up and costs down. Elon actually has an excellent track record about that. What a more down-to-earth CEO would do, is setting less ambitious goals for future programs. That would certainly improve short-term financials, and remove the drama — but it would also hamper longer-term growth. That’s not what stakeholders expect from Tesla.

dmm1240

Apple without Steve Jobs was on the verge of bankruptcy 12 years later. The board brought Jobs back and the iMac, iPod, iPad, iPhone later it had $250 billion in the bank at his passing. Since Jobs died, Apple is still considered a large, successful company, the first with over $1 trillion in market value, but there are also complaints Apple has lost some of its pizzazz.

Musk is to Tesla what Jobs was to Apple. Not the same company without him.

R.S

Apple profits in 2010 (last year Jobs was CEO) were about as high as the profits in Q2 this year. And keep in mind that Q2 didn’t even have a new IPhone.

So yea, totally changed company since Cook is running it. I give Apple 5 more years, at best. /s

Deepak

It is not incompetency, but you need a maverick to take the company to uncharted areas and a normal CEO can’t. Look at the examples of Apple for instance. They had to go and get back Steve Jobs, not because others were incompetent but they wanted a maverick to take it to the next big step

Rolando

Read the embedded file from the SEC, there was no foolproof plan, there was a vague meeting for 30 minutes with Saudi Investment-fund on July 31, where (at a then $299 share-price) they told Elon they acquired 4.9% TSLA shares so far and maybe under some circumstances they might buy some more – IF and only IF Tesla opens a Gigafactory in Saudi.

antrik

That’s not what the document says. It says that terms were vague, and *maybe* they considered the Gigafactory a condition (one of the vague points), but were pretty clear about wanting to take Tesla private, not just “buying some more”.

Rolando

Agree to take private for their existing 4.9% is different from buying out 50-60% of other investors shares. The free available cash liquidity of the Saudi fund is limited, even if their total (locked up) investment is $250 billion.
There are some articles (in Bloomberg and others) were Tesla board members are quoted that the Saudi plant is a big NO and showstopper for possible take-overs.

Derp

Musk leaving does not mean anything about Tesla going private in the future. That is pure nonsense. Musk leaving won’t suddenly cause some investor who was absent (or didn’t have the cash) 2 months ago to arrive, suddenly willing to bail-out.

In fact the greatest strength of this company now is it’s physical assets, production capability, technology IP, not this silly self-destructive ego chud.

antrik

There was never a lack of investor interest. The bank commissioned by Musk liked up enough investors within days. That was *not* why the deal didn’t happen. If current shareholders decide retaining Musk is more important than remaining public, they could very well decide to go through with it after all.

Pushmi-Pullyu

“…the Tesla board will be truly forced into taking Tesla private.”

They would have to find someone, or some group, with deep enough pockets and a willingness to do so. If Tesla couldn’t find enough investors to support the decision before, what in the world would lead you to think they could do so after the SEC took away Elon’s right to be a corporate officer of a public company?

I find it troubling that so many here seem to think that Tesla can’t survive without Elon Musk. Tesla Motors was started without him, and it almost certainly will continue on when he leaves. Tesla would almost certainly grow far slower without Elon around to raise funds, but I find it truly bizarre that so many comment as if Tesla would suddenly collapse if Elon left.

antrik

Tesla was formally founded without Musk, but didn’t start in earnest before he got involved. And it was on the brink of collapse before he finally decided to take over for good.

Sure, it wouldn’t immediately collapse if he left now — but the future prospects would be much much weaker.

Also, there was no lack of investors willing to back him in taking Tesla private. The bank he commissioned was able to line up a proposal within days.

Speculawyer

In the abstract? Yes. In the reality of this case of a dumb tweet? No, that is absolutely NOT going to happen.

Miggy

Tesla is now the Best Selling EV brand in the World for 2018 YTD. Ahead of BYD.
http://ev-sales.blogspot.com/search/label/World

jeroen

I don’t know much about US law, but can’t they just settle the matter? Pay a fine, say sorry, maybe reimburse some shorts (that would probably hurt Elon the most, right in dem feels) and be done with it?

If everything I’ve read in the SEC filing is correct then he should be punished, as his actions were wrong. After all, we are talking about billions every time Elon does a Tweet. That is something to consider before venting your latest mindfart.

But him being removed from his own company sounds a bit too harsh to me.

Doggydogworld

SEC offered a slap on the wrist that would allow Musk to remain CEO with a 2 year ban on being chairman. Also two (badly needed) additional board members. Musk idiotically rejected this sweet deal at the last minute.

John Ray

I hadn’t seen where the terms of the deal had been released. What you outlined seems awful lenient. Source?

Doggydogworld

David Faber at CNBC is a primary source. I think Adam Ross Sorkin got similar info independently.

John Ray

If that is indeed what was offered, he should have taken it.

Doggydogworld

Indeed. Even his strongest supporters say so.

The WSJ reported these same terms, but I don’t subscribe any more and can’t say if their source was independent.

Mick Jones

Looks like this has come right from top in US politics.

R.S

Looks like something that’s going to happen to a top US politician. Being sued for being stupid on Twitter… well maybe teenagers can learn something from it.

(⌐■_■) Trollnonymous

Right?
He can spew his talk of canceling order for a new Airforce 1 and their stocks drop but that’s OK?
He can spew Tariff talk on there and the stocks take a dive but that’s OK?

We can go on and on…..

Will

He’s President.

Clive

President Tweet ‼️

dmm1240

Don’t you mean President Twit?

bro1999

Which twit are we talking about? Trump or Musk?

dan

The president of a country is not the same as the officer of a publicly traded company. The rules for communication are far stricter for an officer than they are for someone in the general public. It’s the same with stock analysts. Who they talk to and what they can say are strictly regulated. Investment banks enact a firewall to make sure that their analysts cannot talk to their traders. These are the rules of the game when you’re dealing with the hard earned money of others.

Ron M

Right the POTUS can lie everyday multiple times and his supporter’s will stand by the orange 🍊 in chief.

Asak

Trump sucks, but it still stands that the rules are different for president than a CEO. Frankly these are also good rules, just because Musk ran afoul of them doesn’t mean there’s something wrong with placing restrictions on what the head of a publicly traded company can say. Without these rules there would be even more outright fraud and corruption than there already is.

The cult of personality stuff is really getting out of hand. You need to just people based on a set of principles and how they live up to them, not give them a free pass because they’re your personal idol. In that way there is no difference between hardcore Trump supporters and hardcore Musk supporters.

1337Warez

Amen. The lack of any objective critical thought is generally evident from both Trumper and Fanboy alike. But if today’s big vote is any indication of similar sentiments, the rule of law doesn’t matter if you’re a rich white dude. I invite all misogynists to downvote THIS.

Pushmi-Pullyu

So… your argument is that if we are a fan of Tesla, then we must be misogynistic followers of the Orange Wannabe Dictator who is busily destroying our country as fast as he can.

That’s not only stupid, it’s factually wrong.

BenG

Like Trump isn’t dealing with our hard-won money every day?

dan

If you don’t like the regulations in the market, then don’t list your company publicly. The rules are there for a reason.

Pinewold

My bet is that Tesla will point at public filings saying social media may be used to release financially material information. Not sure if that has been tested in court!

Asak

The problem is that he lied about having funding (could be exaggerated, doesn’t really matter still wasn’t true). It’s not a problem that he used Twitter the problem was what he said wasn’t true.

There are rules for being the CEO of a company and they apply to Musk no matter how much he and his diehard supporters would like otherwise.

John Ray

He still has to tell the truth regardless of the platform.

Chris

I don’t see how this has anything to do with politics. I’m long TSLA and I am confident that in the long term this company will create a lot of value for its shareholders. However any CEO of a publicly traded company would have ended up with this lawsuit if they behaved like Musk. Just because he is an amazing innovator doesn’t mean that he doesn’t have to follow the rules of the stock market. Tesla has benefited enormously from the benefits of being publicly traded, like ease to raise capital. Now they also have to follow the rules. However even if Musk ends up being convicted, a change in CEO to a more operations and bottom line focused leader might actually be really beneficial in the long run. I am not worried about TSLA.

ziv

Musk is Musk’s biggest problem right now. Tesla would do a lot better going forward if they have Musk in a similar role to the role he plays at SpaceX. Which is a lot less hands on that at Tesla.

BenG

Other than this social media snafu, I won’t complain about Musk’s management of Tesla, not when he made the Model 3 the absolutely revolutionary success that it is. He changed the game, he’s the guy I want in charge, PERIOD

Doubldutch

I also want him in charge, just not in charge of his social media accounts. The passwords for those should solely be with his lawyers, who should check every tweet.
Imagine you had someone powerful like the president of the counrty who would just spout any nonsense…..oh wait…

chano1

Your suggestion would be a disaster, like every one of Steve Jobs successors when he was exiled. The exception is Jobs’ own choice of replacement CEO – Tim Cook.

thimblepk

What do you mean? He can use the blueprint that he already implemented at SpaceX in Gwynne Shotwell.

Eric Alvarez

Indeed, fundamentals are still good, particularly as they are over the Model 3 production hell. And Musk himself said last month that he’ll hand the keys of Tesla to anyone thinking he can do a better job. However, that’s an hell of distraction.

John Ray

Count me in the camp that believes that Tesla will have to do a capital raise to survive. At this point, I believe that Musk is an impediment to that. Hiring or promoting a competent leader might go a long way to easing the markets minds. I am neither long nor short Tesla and have no financial interest in the company.

antrik

Tesla was only able to raise so much capital in the past because Musk has a track record of bringing his crazy ambitious plans to success. (Albeit usually later than planned…)

groingo

I agree, this SMELLS OF TRUMP!

Pushmi-Pullyu

Apparently you need to adjust your tinfoil hat; it’s affecting your sense of smell.

chano1

ICE industries, big oil and the vulnerable shorts.

Dimitrij

What did the “ICE industries, big oil …. ” exactly do to cause Mr. Mu$k to tweet all kinds of regrettable nonsense?

Robert Weekley

They drove him crazy? Temporary Insanity Plea?

ffbj
Well, I don’t think much will come of this, since intent is required, and it’s difficult to prove, though Musk through various statements, and actions, has indicated his desire to hurt short-sellers. Of course contend that hurt had already been done as Tesla had cut to ribbons already many time over. Add to that the fact that this will probably tied up in the courts for years and then when a Democrat becomes president he can pardon Musk. In his defense I would say he, and his company were continually under assault with lies, fabrications, and perhaps sabotage, from short-sellers, and others adamant to see them fail, and therefore some actions are justified, and understandable, even if they are incorrect, and not according to Hoyle, Additionally I would focus on the SEC itself and ask what its motivations are, and which companies benefit from actions v Tesla. In other words if the influence, from whatever quarter, was brought to bear against the SEC to file these charges, (and it was). In the final analysis it’s merely another obstacle for the juggernaut that is Tesla, the spearhead of the ev revolution, and we all know what a juggernaut does to an… Read more »
wavelet

Have you read the doc? It’s pretty clear that he violated the SEC rules. While I’m pretty sure he had no criminal intent and didn’t personally profit from the affair, it doesn’t matter. He shouldn’t be CEO (or any other formal Officer) of a public company, period. The reason for his actions (very likely , under too much stress) doesn’t matter either. The board should force him to resign any executive position, and make him a consultant.
SpaceX is enough of a fulltime job, and his kids would actually get to see him.

Epsilon

Not only did he violate the rules, he flat out lied to the SEC when interviewed. Big problem made bigger.

amt

What about The Shorts Constantly Lieing About Tesla Going Bankrupt , that Tesla Stock Is Worth Nothing & They only Had Cash To Last a Week & All That BS ..

yo

Well if the shorts are the CEO of a publicly traded co they should be put through the wringer but they probably aren’t…

antrik

What makes you think he lied to the SEC?

Pushmi-Pullyu

He read it on Reeking Alpha, so he “knows” it’s true! 🙄

Nix

The suit doesn’t make any claim of anyone lying to the SEC. Did you actually read the suit?

bro1999

How’s are your TSLA holdings doing this morning, Nix? LOL

Pushmi-Pullyu

So… your argument is that Nix must be wrong because the TSLA stock price went down today?

Well, that’s about as good as most of your “arguments”. 🙄

amt

The Doc is a Load Of “BS”…Too much Lies & misinformation , & Negative Untruths by The Shorts ,,The Shorts Should Be SUED For Sabotage. Shorts Always Talk Down Tesla To Get The Stock Price Down to Fulfill their Agenda ….FACT:::Non Stop Constant LIES!!..

Dan F.

Sounding a bit like Stalin. Always someone else’s sabotage. No, Musk did a boneheaded thing that may well end up being expensive.

chano1

How much did you get for saying that, hmmm?
If you believe your words, there are no adjectives to describe how profoundly foolish your toxic suggestions are.

Pushmi-Pullyu

You’re way off base, dude. Wavelet is one of the more sensible, more well-informed people posting here. That doesn’t mean I entirely agree with him, but he’s certainly entitled to his opinion… because it’s an informed one, and yours isn’t.

pjwood1

The SEC’s case is weak, on ffbj’s observation Musk’s intent likely isn’t strong enough, certainly not to have a judge remove him. Fraud is a high bar. The suit pivots on the Saudi wealth fund indicating to Musk, that terms would be favorable to them, if Musk put something together. They have the resources to back their financial interests. Musk is just a genius, who is great but not perfect at many things. He thinks, he mulls, he tweets. He’s not a financial lawyer, savvy bean counter, or “seasoned CEO”. I don’t see the SEC winning, here. Two cents.

Asak

I actually think the problem is he doesn’t think enough, at least not before speaking/tweeting. Really it would be in his best interest to give up his Twitter account, or at least have a company lawyer sign off on each tweet before it goes out.

Also how can his motive be seen as anything other than to pump the stock price up? The intention seems pretty clear to me. This is simply not something CEOs are allowed to do and he absolutely shouldn’t have done it.

antrik

There is no reasonable doubt that he was serious about wanting to take the company private. The way he communicated it was of course highly misleading, and I don’t know whether being serious about the whole thing is enough to acquit him — but the idea that he only did to manipulate the stock price is ridiculous. If that’s indeed what the case pivots on, I don’t see him having to fear much.

ModernMarvelFan

“since intent is required”

That is only in criminal cases. SEC filed civil suits.

DOJ is in charged of criminal cases.

Pushmi-Pullyu

If it’s only a civil suit, without any criminal charges, then won’t the outcome be limited to just a fine?

I’m not that knowledgeable on these matters, but applying common sense, I doubt that the outcome of this is going to be anything more than a wrist slap and a moderate fine. I think it would take a much more egregious impropriety on Elon’s part for the Board to force him to step down.

Not that I personally would object to seeing someone else as CEO of Tesla; I’ve been saying for some time that it may be time, or past time, for Elon to step back to a less prominent role at Tesla.

All just my opinion as an outsider looking in, of course.

Doggydogworld

Thee SEC is seeking to bar him from being a principal officer or director of any public company.

chano1

There is no way they could stop him from being in charge, even if he wasn’t CEO. He is the only ‘man with a plan’ for a great future.

Pushmi-Pullyu

Oops! 😳

Thanks for the correction, Doggy. That’s what I get for not reading the document in question.

Seven Electrics

The SEC has the statutory authority to ask a judge to enforce a bar. See: https://www.sec.gov/news/speech/2012-spch101812laahtm and https://www.sec.gov/about/offices/oia/oia_enforce/overviewenfor.pdf.

Alonso Perez

That doesn’t mean that a judge would grant that request. I am sure the defense would argue that the damage to Tesla, and to all Tesla stakeholders, and even the Bay area economy, would be large and would defeat the purpose of the SEC action (supposedly to protect investors). They could settle half-way and have Musk barred from the board, but not from being an officer, or the reverse, plus some kind of injunction on Musk’s tweeting (probably couched as “direct public communications”), plus a fine. There would be no disgorgement because Musk did not profit from the tweets (he did not “pump and dump”, which weakens the SEC case from a punitive standpoint).
Also, IMHO, the defense should particularly underscore that short sellers are not investors, should not be considered investors, and that company officers not only have no obligation towards short sellers but have, by definition, the fiduciary duty to act against the interests of short sellers.

wavelet

I’d suggest reading the entire lawsuit carefully. It only mentions short sellers as a possible motivation for Musk to do the exercise — it otherwise mostly points out that Musk never checked whether _all_ current investors could actually remain investors after going private before stating several times they could (they can’t, since the overall number is limited).

antrik

Indeed; and they did successfully in the Theranos case. That was on such a completely different level though, asking for the same relief here is absurd.

Along with certain statements made at the press conference, I can’t shake the feeling the SEC is more interested in making an example, than actually protecting the interests of Tesla shareholders… And going by some of the questions asked at the press conference, I suspect I’m not be the only one thinking that the SEC might be overreacting here.

101101

Needs to be criminal cases against shorts and againt SEC for corruption

Nix

MMF, That isn’t what the United States District Court Northern District of California says. The judge in Wochos v Tesla dismissed that civil suit in part based on the precedent from Binder v. Gillespie, 184 F.3d 1059, 1063 (9th Cir. 1999)

“…To state a claim under § 10(b) and Rule 10b-5, a plaintiff must allege (1) a misrepresentation or omission of (2) material fact (3) made with intent…”

This is just another civil suit as far as this precedent goes. Rule 10b-5 fraud rules simply are NOT a hammer to be used against companies unless there is proven INTENT to commit fraud.

Doggydogworld

Nix – in the same decision NDCA quoted Provenz v. Miller which only requires “no reasonable basis to believe the statement to be true”. Wochos was about forward-looking statements. The court dismissed because Tesla made extensive safe harbor statements. This SEC suit is much different because it deals with statements of fact, which were later shown to be false.

There is no safe harbor for lying.

Doggydogworld

Also note the Supreme Court specifically took on Binder v Gillespie to clarify issues the lower courts were having with private action 10b-5 suits, not SEC suits. And other discussions mention scienter, not intent:
http://ijbssnet.com/journals/Vol_3_No_2_Special_Issue_January_2012/4.pdf

Binder v. Gillespie is not nearly as relevant as you think. You’ve been wrong about this case from day one, dismissing it a nothingburger and such. Four former SEC chairs, and now the current one, say you don’t know what you’re talking about.

antrik

Proving scienter here seems questionable, though. Musk makes every impression that he wasn’t consciously doing something he knew to be wrong — or “compromised his integrity”, as he puts it. I guess that might be why he wasn’t willing to settle: he hopes for the court to acknowledge his position on this point…

Seven Electrics

Under Section 10(b), intent is not required.

Nix

You should read Wochos v Tesla dismissal, where the judge quoted Binder v. Gillespie:

“To state a claim under
§ 10(b) and Rule 10b-5, a plaintiff must
allege (1) a misrepresentation or
omission of (2) material fact
(3) made with intent”

chano1

True.

(⌐■_■) Trollnonymous

Somebody is in some Deep DooDoo,

bro1999

Watch all the fanbois freak. hahahaha

ffbj

Yes, let’s delight in the suffering of others.

ModernMarvelFan

Suffering? of fanbois? Well, I think there is very little compassion for fanbois…

I do feel for Elon. He was so stressed and so compassionate about his company that he feels like he has to defend it against haters all the time. But he should have just stayed off twitter and worked on burning shorts when Tesla delivers with actions.

Seven Electrics

Longs who bought high were deeply hurt by this attempt at market manipulation. No one should delight in their suffering.

antrik

Except we all know it was not an attempt at manipulation.

Dan F.

It’s not the intent, it’s the effect of the false information (funding secured) that he stated as fact.

antrik

An unintentional attempt at manipulation? That doesn’t make sense.

bro1999

Musk was warning about the “short burn of the century” months in advance. No intent eh?

antrik

Neither does the timing really show a connection (he predicted the short burn to happen a month before the announcement), nor does his expecting a short burn prove that he talked about taking Tesla private in order to trigger that short burn.

pjwood1

…or the suffering of gleeful sycophants?

u_serious?

Our justice system is so effed up, if they do get him he’ll pay a get out of jail fee and a slap on the wrist.

Ron M

Freak hell yes I’m gonna buy more Tesla now that it’s on sale.

Pluto

I would wait a little longer, for a couple weeks probably

chano1

It’s already recovering. Minimum $500 by year’s end.

Alonso Perez

Probably just short covering. Nobody knows where the stock will go tomorrow.

Pushmi-Pullyu

The stock is down roughly $40 in after-hours trading. I think we have a pretty good indication of where the stock is gonna go tomorrow, at least initially, on this news. But with end-of-quarter results coming soon, and quite possibly Tesla showing a net 3rd quarter profit, I doubt it will stay down for long! As Ron M already said, this might be seen as a good opportunity by real (“long”) investors to buy more TSLA stock.

pjwood1

Shorts drive the thinly-traded after-hours.

And who are Ron, Pluto and Chano?

Alonso Perez

Yeah, this is a dangerous stock for longs or shorts right now. If you’ve made money, take it and run. Shorts have the advantage now but if Tesla settles with the SEC out of court (which is by far the largest percentage of cases the SEC brings), they will get crushed just as suddenly as the longs have today.
I hold no position and don’t plan to. It’s just too wild. Everybody has been burned at one point or another.

Pushmi-Pullyu

Yup! You would have to be either very fearless or very stupid to invest in TSLA either long or short, at least for a few days until things settle down… or at least as much as they ever settle for this highly volatile stock.

Nix

That is where dollar cost averaging comes in. Instead of betting on a single event or a single day’s price, you slowly buy into your position where you are betting on long term success (sometimes measured in decades).

William

DCA for the best asset allocation, is obviously long term strategy at its best.

antrik

You expect more bad news?

Pushmi-Pullyu

There will be good news; there will be bad news. Both are inevitable, both in the short term and the long term.

Nix

As a GM fanboiee, did you freak when GM plead to criminal charges in the deaths and grave injuries of hundreds of people, and agreed to pay nearly a Billion dollar in fines, plus another roughly billion dollars in civil suits?

https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-criminal-charges-against-general-motors-and-deferred

bro1999

Leave it to Nix to drag GM into a 100% Tesla discussion to try and deflect attention. Lol
Exactly what the mods asked people not to do, yet Nix just can’t resist.

antrik

Of course, you never violate comment guidelines. Like, with the very comment he was replying to…

Spoonman.

Hopefully, whatever the outcome, Tesla can continue transforming the auto industry.

ffbj

Yeah look at Ford and GM lawsuits up the wazoo, and many deaths, people maimed, laid at their doorstep, but no one thinks they are going away anytime soon.

ziv

This, Spoonman! I like Musk and respect him a great deal, but he has been making some silly errors that have hurt Tesla. The big thing here is, let Tesla be Tesla. Help it to grow and transform the face of light duty automobiles all over the world! And semi’s too!

Alonso Perez

The company will survive for sure. But Musk may have to resign. I suppose it would go to Straubel.

Speculawyer

They will. This will get settled with a slap on the wrist & a fine. But expect the shorts to try to hype it up like crazy.

Doggydogworld

WSJ claims they had a settlement worked out and Musk scuttled it at the last minute.

ffbj

Yes, that is correct. They want Musk to step aside for a few years and stick 2 more directors on the board.
Apparently Musk balked at that last stipulation, and decided to fight the law suit.

ModernMarvelFan

SEC doesn’t have criminal investigation capability. They can refer the case to DOJ for that.

SEC can levy financial penalty and prevent him from holding executive position at all public traded companies.

Maybe the best way is to settle with SEC.

If that doesn’t work, Elon can always resign and work as a “consultant” or just another “engineer” at Tesla. =)

zzzzzzzzzz

DOJ is already investigating, it was announced a while ago.

And it isn’t just his personal problem, he was acting as CEO and Chairman of the company. I.e. civil class action lawsuits for all the market volume after the 420 tweet will cost the company really serious money when everything will be completed.

Doggydogworld

SEC didn’t file suit against the company, though. That’s important.

Pushmi-Pullyu

If you say so, it can’t be true.

101101

And shorts that pay for lies in the media to profit from the lies aren’t liable?

ModernMarvelFan

No, since they aren’t part of the company executives. Anyone can say anything about a company. Company can sue for defamation. But when the executives of a public traded company speak, they are held to the SEC rules. That is the price for a public traded company.

Pushmi-Pullyu

“No, since they aren’t part of the company executives. Anyone can say anything about a company.”

Seems to me than an organized attempt to defraud investors by using FÜD-filled “articles” from “analysts”, and FÜD spread on social media; an organized attempt to manipulate stock price, should be prosecuted as fraud, no matter who is doing it.

Everyone is entitled to his or her honest opinion, even if it’s wrong. But FÜD isn’t merely wrong, it’s an intentional disinformation strategy, and fraud is fraud.

Nix

That is incorrect. All of the people involved with running funds that short Tesla (you know the names) ALL have to follow the exact same SEC rules. They can (and should) be held liable for their actions by the SEC.

bro1999

Shorting is not illegal. Blatantly lying about having funding secured to take a company private in an attempt to cause harm to shorters and misleading investors is illegal.
Leave it to the fanbois to ignore reality. *rolleyes*

Terawatt

Nor is shorting immoral! And nor does it affect a company’s prospects at all.

If people lie about a company in order to manipulate short term stock value, that’s immoral – and potentially illegal – whether they stand to gain from the stock going up or down.

antrik

Reality is that nobody claimed shorting is illegal. But sure makes for a nice strawman, doesn’t it?

Nix

If the DOJ intended to file criminal charges the DOJ would have taken the lead. They coordinate on these issues.

The SEC action effectively proves that the DOJ didn’t see evidence of criminal acts. We will actually never get an answer on that since they never actually made any public statement and won’t now

Doggydogworld

Although SEC and DOJ do coordinate, they don’t always file simultaneously. SEC charged Elizabeth Holmes three months before DOJ filled criminal charges, for example.

bro1999

Good job turning Nix’s lame hypothesis into swiss cheese. Lol

wavelet

Maybe you missed it, but the DoJ requested related docs from the SEC a week ago. Supposedly, that means there’s likely to be a criminal investigation (otherwise the DoJ wouldn’t have a reason to be involved). Obviously an investigation doesn’t in itself mean anything, and I don’t think Musk had any crimes in mind.
https://www.cnbc.com/2018/09/18/tesla-stock-drops-after-company-reportedly-to-face-us-criminal-probe-over-musk-statements.html

ModernMarvelFan

I didn’t miss it. That is a separate article. this one is about SEC. SEC itself doesn’t have criminal prosecution capability. DOJ does.

antrik

I don’t read that as the DoJ requesting docs from the SEC?…

Rolando

This requesting for documents from SEC was mentioned in many newspapers (Bloomberg etc…) , because DOJ don’t want to get active in parallel when they can get SEC do the heavy lifting first.

Doggydogworld

Actually it’s the SEC who usually steps aside and freezes their civil suit if the DOJ files criminal charges. They coordinate, so if the DOJ were anywhere near ready to file I believe the SEC would have waited.

Pushmi-Pullyu

That’s what I thought. Criminal charges almost always supersede civil ones, in investigative agencies, so it seems very likely that the SEC wouldn’t be charging forward if the DOJ had enough evidence to develop a criminal case.

However, there’s still the possibility that further investigation by the DOJ may uncover more evidence.

antrik

Feel free to post a link to these supposed mentions — since the link posted above doesn’t make mention of DoJ requesting documents from SEC. (Nor did any of the other news I have seen on that matter.) It only talks about DoJ requesting documents *from Tesla*.

Nix

You are right that the DOJ requested docs, but you are wrong on the timeline. What was announced a week ago, was that a month earlier the DOJ asked for docs.

wavelet

Thanks for the correction (-: I strongly doubt there was any nefarious intent, so nothing will come of any criminal investigation (it’s pretty clear Musk wasn’t pumping the stock to sell it anytime soon…), and the SEC suit is the main show here.

antrik

Asked for docs from Tesla. Not from SEC.

Anthony

The settlement offer should be Elon stays off twitter/insta/whatever social media for one year. I think it would benefit everyone.

Doggydogworld

He’d just start a Twitter competitor. Exponentially better!

101101

But that would be silencing Teslas PR, why not silence BMW or Exxon?

ModernMarvelFan

If BMW and Exxon executives lied about taking their companies private at whatever price, they should/will be charged by SEC as well.

Asak

I’m not sure whether Musk is providing positive PR at this point. Also an argument can be made that he shouldn’t be wasting so much time pissing around on Twitter anyway. He must have something better to do. A separate Tesla Twitter account could also be established for PR purposes if it doesn’t already exist.

antrik

“There is no such thing as bad publicity” 😉

He isn’t wasting much time. He is mostly “pissing around on Twitter” as a means of unwinding, as far as I can tell. Believe it or not, he takes a few hours every couple of days or so to do something else than work. (In the strict sense at least.)

chano1

But he would still call ALL the shots. No one else has a clue about future strategies.

Speculawyer

A settlement is exactly what will happen. They are not going to stop him from being an exec because of a stupid tweet.

Doggydogworld

I argued for a settlement from day one, but it looks like this is going to trial.

antrik

Doesn’t mean there won’t be a settlement…

Doggydogworld

You were right. Musk came to his senses. Glad to see it.

bjrosen
This is an open and shut case. There are very strict protocols for making announcements that can move the price of the stock. First off you don’t make them in a tweet, you make them with a carefully worded announcement, vetted by your lawyers, and issued after the close of trading, usually on Friday, which gives the world time to digest the information before acting on it. In the case of something like this, taking the company private, you never ever just say that in a off the cuff manner. First you get approval from the board of directors, who in this case were just as surprised by his announcement as everyone else. If the board approves it then you explore all you options in private, when you’re ready you take it back to the board for approval, if they do then you make your carefully worded announcement. I worked at a supercomputer startup in the 1980s that overstated their earnings, every member of the board ended up paying a million dollar fine and were banned from serving on the board of any publicly traded company for 10 years. Musk is much higher profile than those guys were, his fine… Read more »
Will

Yes they should get new boards members in there. Those are lackeys and Elon needs help they not doing it for him

G2

SpaceX isn’t publicly traded, so SEC has nothing to say about that.

101101

Sorry that never going to happen I think petrol radically underestimates the desire of people who think to be rid of petrol. Like it or not Musk is still one of most influential people on the planet, there is no equivalent CEO or board chairman and he has credibility which is something people like Trump and a couple recent SC picks don’t.

chano1

So why are the shorts’ lies, that destroy huge value, go unremarked and unpunished? Get real.

ModernMarvelFan

Because they are investors or speculators. When you are company executives, you are held to the SEC rules. That is the price of public traded companies.

Jesse

This is not about the short sellers at all, this is about Musk and Tesla. Musk and Tesla made this mess all on their own. Now its time to man up and suffer the consequences. If the SEC has its way then that will be the end of Elon Musks career as Tesla CEO and Chairman of the Board…

To be perfectly honest, I think this might be really good for Tesla, now they really need someone who has the operational capabilities to lead a multinational, multi-billion dollar company and who has a proven track record on delivering results. Tesla needs to turn profit, that certainly is not up for debate.

Luckily there are a number of really good and charismatic leaders across the world, personally I would most certainly want to see someone like Donald Walker from Magna International for example

antrik

“Tesla needs to turn profit, that certainly is not up for debate.” Actually, that is very much up for debate. Tesla is still growing fast, and will likely continue for years to come. They are not really expected to turn profit while doing so.

Musk has an amazing track record of delivering results. During his time as CEO thus far, Tesla turned from a start-up struggling to deliver the first few hundred Roadsters, to a sizeable company delivering ~300,000 cars per year at the current rate.

antrik

The SEC made it pretty clear that the don’t consider announcements on Twitter different than other media.

There is no doubt that Musk has broken a bunch of rules with his misleading statements. I have a hard time believing though that the courts will find it to be as serious as actually faking earnings…

Rolando

There is a 23 page document from the SEC embedded above.
So if no misleading intent – then definitely gross in_competence is obvious when :

(1) claiming “funding secured” after a loose 30-45 minute talk with Saudi’s without any % agreement, no price offer, no timeline, no firm commitment etc…
(2) When claiming “shareholders agree” after 2 Twitter users (holding 5 ? , 10? shares ????) are interested to keep shares
(3) Without any talk to large scale investors (pension funds, stock retailers) if they can invest into a private company
(4) not knowing that a private company can’t have thousands of small shareholders
(5) not talking to investment banks or legal advisors for a proper ‘take private roadmap’
(6) not asking the board for approval for such an utmost change of corporate set-up
(7) violating NASDAQ and SEC rules of public disclosures in midday trading
……….
That will be the main points of SEC why Elon Musk is seem unfit to be a CEO of a public traded company

Eric Alvarez

Fact is he can plead gross incompetency : ) But that’s a shareholder case, not a SEC case.

antrik

Where did you see “shareholders agree”?…

Incompetence or not, this is unrelated to my point that it is not a comparable offence to overstating earnings by a factor of 1,000.

Toni Maroni

Tesla already filed an 8-K back in 2013 claiming that Musk’s Twitter account is an official channel for such announcements.

Epsilon

No financial firm will lend money to TSLA now. Apart from Elon’s problems this could have dire consequences for the company. Maybe Apple will buy it.

Clive

Cool story bro.

Great reason to take it private.

Tesla’s staff lawyers will give them hell.

Clive

I hope Elon files a big ass counter suit.

amt

Yea, For Stock Price Sabotage

Pushmi-Pullyu

I think a lot of the comments here are seriously overstating the seriousness of this suit — the anti-Tesla smear campaign brigade smells blood in the water.

But what in the world would give you reason to think Elon Musk has standing to counter-sue the SEC? I don’t see any basis whatsoever.

Clive

To waste their time like they doing with his.

Total corruption.

Dam

it will now go private, via Ch11

Will

Lol

Clive

No they will not Shorty.

Pushmi-Pullyu

*Slow clapping* @Darn.

Seven Electrics

Tesla the company was not named in the lawsuit, only Elon.

Will

Yes Apple needs a car company

Clive

I don’t believe Apple needs anything.

I seriously believe that project titan is still alive.

Regardkess they definitely have enough money to buy Tesla no doubt about it.

Will

If Amazon buys FCA, which on the chopping block from my sources in Toledo, then Apple needs to get into the game

Pushmi-Pullyu

Apple “needs” to get in the car making game like a racing boat “needs” a battleship’s anchor.

It’s said that Apple has a lot of ready cash. Well, if it wants to get rid of that, then investing in an auto making business would be an excellent way to do it!

chano1

If Apple produce a car, it will not compete with Tesla. It does not have AP.

Will

Make that $600 billion in cash reserve from Apple. That’s how a company should be run

antrik

Actually many would argue that a company making such obscene profits should pay more dividends, rather than hoarding the money…

But that’s unrelated to Tesla, which is obviously in a very different situation.

antrik

Why would this affect Tesla’s ability to raise money?

Doggydogworld

It will be almost impossible to raise money in a public offering with fraud charges pending against the CEO. Tesla could possibly do a private offering. More likely, Musk would take a leave of absence until the suit is resolved.

antrik

Considering that the charges do not in any way relate to Tesla’s financial situation etc., does it really affect a public offering?…

(Only way I can see this affecting their ability to raise money, is that potential investors may have less faith in their future prospects in case Musk should indeed get banned… But since the drop in stock price thus far isn’t too shocking, I don’t think it registers a very serious concern.)

Pushmi-Pullyu

“No financial firm will lend money to TSLA now.”

And tomorrow, a Hell-Gate will open up under Tesla’s Fremont plant and rip it apart — one is about as likely to happen as the other. 😉

P.S. — “Tesla” is the company; “TSLA” is the stock. I’ve noticed that short-sellers like you tend to confuse the two.

bro1999

“P.S. — “Tesla” is the company; “TSLA” is the stock. I’ve noticed that short-sellers like you tend to confuse the two.”

To the hardcore fanbois, “Tesla” and “TSLA” are the same thing, since they are swimming in TSLA stock while defending their precious “Tesla” on internet comment sections. Lol

Pushmi-Pullyu

If I’m not among the hardcore Tesla fanbois, then the list of who is, among the Üsual Suspects* posting here, must be very short indeed!

*I’ve seen some objections to the term “Üsual Suspects” (and in fact I can’t even spell it properly, or the website’s censör-bot will delete my comment), but let me be clear that I mean it as an affectionate term for those of us (myself included) who are regular commenters on this website. Others are of course free to use the term to mean something else.

William

It’s probably coming (October Surprise in the B.A.) next month, but it will be more seismic (San Andreas Fault), and less satanic, than your “open up” H. hole theory.
🤥

Counterpoint

So essentially, if Mr. Musk cannot sufficiently prove that he did not violate the SEC codes, he will no longer be in charge of Tesla (or any other publicly traded company). Since his style of leadership is aspirational and inspirational (i.e. “let’s do this thing no one thinks we can do”), I wonder what could happen to Tesla if he is replaced by a more pragmatic leader.

Epsilon

A ‘real’ CEO would be a plus. Elon can be the visionary/evangelist.

Mark.ca

If you are annoyed by him now just wait till he is free of SEC regulations. From an unofficial position he can take Tesla private every week.

Doggydogworld

No, there are specific rules for anyone announcing a tender offer whether they’re and insider or not.

Will

Who’s has $40Bil to give

wavelet

That’s if the SEC wins the case, of course or Musk settles (I expect he will).

Epsilon

Even if they don’t win Elon has demonstrated CEO is not a good use of his time or a good fit.

antrik

That’s just not true. Despite some temporary setbacks, ever since he took over as CEO, Tesla has been wildly successful. He’s not above making mistakes; be he is clearly doing a very good job on the whole.

Pushmi-Pullyu

Quite true. Gotta hand it to the FÜDsters — as they say, “Give the Devil his due” — they have managed to distract most people from considering how remarkably successful Elon has been at guiding Tesla to an astonishing degree of success, and growing the company at an even more astonishingly rapid rate of speed! This despite an almost universal prediction among analysts circa 2008-2013 that Tesla would very likely fail.

Elon Musk is an entrepreneurial genius, and becoming a self-made billionaire was no fluke or stroke of luck.

Will

How about grow your company with own money. Nope still haven happen

Pushmi-Pullyu

Nobody could possibly fund the growth of a startup into a major auto maker out of his own pocket. That takes hundreds of billions of dollars. Heavy industry is capital intensive.

Will

There cars are successful but not the company

Seven Electrics

Why would the SEC settle? This is egregious and they want to make an example out of him. Otherwise, the SEC looks impotent.

Pushmi-Pullyu

“…they want to make an example out of him.”

You have confused your own deep hatred of Tesla with SEC policy.

Clive

Truth ❗️

Seven Electrics

Removing Elon would be good for Tesla. If anything, this good news for the company.

Clive

Hardly.

He is the brains behind Tesla.

antrik

The vast majority of investors do not seem to think so.

Clive

Without Elon’s passion Tesla would not exist!

Will

They said the stuff about jobs and Apple buy they doing very well without him

Clive

Tim Cook was mentored by Jobs

Jobs picked Cook to replace him

Clearly you know little about Apple 🍏

Rolando

Investors seems to be split : Some want a professional financial literate CEO – others want to keep ‘the face’ of Tesla at all cost at the helm.

So maybe a workaround : Removed as CEO, but Musk can be consultant, Chief of R&D, strategist, visionary etc… but not the head honcho doing financial announcements.

dmm1240

For an example of what a “professional financial literate CEO” does, see Apple. Scully and Amelio had Apple all but in Chapter 11 by 1997. It took bringing back Jobs to save the company.

Doggydogworld

On the flip side, Apple is doing fine under Cook.

antrik

Going by what the SEC said at the press conference, I do think they actually want to make an example out of him.

101101

And I want to see an example made of the shorts, a criminal prosecution and same for the SEC. This thing is way bigger than the SEC or Wall St. this is about survival. And its about principle, enough of liars calling the honest liars.

ModernMarvelFan

You clearly don’t understand the SEC rules. You should read them before whine about what is fair or not fair.

yes, shorters are haters. But short isn’t against SEC rules.

dmm1240

The SEC has looked impotent since 2008. They did NOTHING before or after the 2008 Crash.

That said, Musk really put his foot in it.

ffbj

They offered settlement, which was rejected by Musk.
Your summation is just your own point of view.

Doggydogworld

I said from the start he needs to settle ASAP. Musk’s statement shows he’s not willing to settle on an terms the SEC would find reasonable.

101101

Should not settle, should investigate and then seek the removal of the officers at the SEC. Follow on President can seek their prosecution. His 23 million twitter follwers need to use politicians to kill this with a very simple command: fix this or I will work to remove you from office.

101101

The point of Tesla is not to make money for fools its first and foremost to kill petrol slavery and end the reign of people who think they have a right to profit from poisoning others.

yo

Sorry, but that is marketing…
When Tesla became a public company they are essentially required by law to maximize their profit within the law…
In the land of demonocracy the majority of the people being poisoned want bigger ICE trucks and bigger ICE SUVs to poison themselves and their children some more…
Sadly the reign of people who support ICE is the vast vast majority and only straight up cheaper sales prices will change that…

Will

Calling people pedo is not inspirational

Clive

He was actually correct.

That guy is a Pedo!

antrik

Agreed. Though to fair, the things that guy said about Elon prior weren’t exactly “inspirational” either…

cab

First Martha Stewart and now this!

Clive

🙃

Pushmi-Pullyu

As a reminder, Martha Stewart wasn’t sent to jail for insider trading. She was sent to jail for perjury, for lying under oath during an investigation of her stock trading.

Clive

And her company was never ever the same.

What a shame.

Seven Electrics

Elon wasn’t charged with insider trading, either, but they’re both examples of high-flying egos who think they are above the law.

Clive

To some degree I don’t think you can be a Elon Musk without some sort of ego.

Unfortunately being reactive is ego based and sometimes it gets the best of us all.

zzzzzzzzzz

“Ordering that Defendant be prohibited from acting as an officer or director of any issuer
that has a class of securities..”

Retirement secured!

DOJ in followup criminal case may ask what size of orange suit he wears though… 🙁

Ron M

Get an XXL jump suit for the POTUS he’s guilty on so many levels.

Will

I wish. It’s hard to imprison a sitting president. They didn’t get both lying Clinton’s

Spider-Dan

Hillary was a “sitting President”?
Right-wing fever dreams getting even more vivid these days…

Pushmi-Pullyu

Another missive from the hard-right wingnut bubble world!

Back here on planet Earth, Hilary has never been President… very unfortunately, considering the wholly unfit clown we wound up with!

Will

No but she wasn’t unfit either #crookedHilary

Will

I voted for my Governor in the primaries Kaish from Ohio. Moderate GOP and hated foe of orange 🍊 clown 🤡 trump. He didn’t even go to the nomination in Cleveland because the scandals and didn’t want to Associate with Trump. Voted for Crooked Hilary in the General

Pushmi-Pullyu

You parrot the Orange Wannabe Dictator quite well. Polly want a cracker? 😉

Will

In Ohio there’s very farm and rural areas that voted for him. I didn’t. I’m an independent and mostly vote democrats but Trump has made his enemies here in the state, at least we have an independent thought and choose moderates compare to take my money with taxes and no housing California

William

Go easy on “unfit clown(s)”, they don’t need to be so unfairly Trumped!

Pushmi-Pullyu

You’re right, that was terribly unfair of me. He’s a cockroach.

comment image

William

Now that is “Fair and Ballanced” Roach Reporting!🙄

Will

No but First lies his butt and so did Hiliry

Get Real

Go back to Breitbart you clown.

Will

New York Times ready you Daily Beast

Bennyd

Time to sell Tesla to Apple…

Will

Well for some reason my comment was deleted but going to say it again “Prison secured”

Will

Give me more down votes😛😛😛. No. It’s 420 fine in millions

BenG

Sounds about right! 😀

Clive

Maybe you should clue in as to why it was deleted in the first place.

Pushmi-Pullyu

Hey, there’s an idea!

Will

It was not disrespectful to anyone.

Clive

Okay then you suck as a stand-up comic.

Doggydogworld

A few things that matter:

1. SEC filed against Musk personally, not Tesla or any board members. The company and board didn’t do a great job of immediately distancing themselves from Musk on this, but apparently their efforts and subsequent cooperation were enough.

2. SEC filed civil charges without waiting for DOJ. I wouldn’t read too much into this, but the two agencies do work together and often file simultaneously. At minimum, this means the DOJ does not yet have enough evidence to proceed.

3. Discussions between SEC and Musk did not lead to settlement. IMHO Musk is being extraordinarily stupid by not settling immediately. He’s a bet-the-ranch type of guy, though.

4. Some details in the suit, such as mention of short burn Tweets and 420/Grimes are bad signs.

Despite this being an open-and-shut case, if it goes to jury trial Musk will have better lawyers and celebrity charisma on his side. If he really wants to fight this, though, he needs to take a leave of absence. Otherwise he could drag the company down with him.

ModernMarvelFan

” if it goes to jury trial Musk will have better lawyers and celebrity charisma on his side. ”

That is true. But civil suits only requires a majority.

antrik

Settling before a case was filed? Is that something that actually happens?…

Pushmi-Pullyu

Well of course it does, and frequently so in civil cases. Threatening someone, or some company, with a lawsuit, is often sufficient to bring them to the negotiating table.

Clive

After…

There would be nothing to settle otherwise.

Doggydogworld

I’d guess the SEC settles 95% of cases before filling charges. Maybe 98%. WSJ says they had a settlement ready to file this morning (on Kavanaugh day, no less!) but Musk bailed at the last minute.

Rolando

Yes happens most of the time in the USA, even in your home city Berlin “aussergerichtliche Einigung” is possible. This get a lot of load removed from the courts.

antrik

I’m aware of settlements — I was just under the impression that these typically happen *after* a case was filed…

Rolando

Golden rule : do not speak about ongoing investigations and cases ….
As InsideEVs remarkes “” Neither the SEC nor Tesla/Musk can comment on this due to it now being an open, official lawsuit. ***UPDATE: Scratch that. “”

This is a NO-NO , never comment on open cases, and never criticize a government organization for doing their job in an ongoing case !!!

And as you already recognized : the SEC mentioned several times the “burn the shorts” before the Aug-7 funding secured tweet, later on Aug-7 in several more tweets ‘shorts’ take the center point, also before the call-off tweet 2 weeks later — shorts are everywhere ….
The SEC focus is on false claims and unprofessional behavior (just loose talks as basis of “funding secured”, no background check on large investors ability to go private etc…) so it’s really scary SEC is mentioning the ‘shorts’ so much – because the DOJ criminal investigation is piggy-riding on this SEC case, also the several class action lawsuits will get a boost if the SEC case ends “guilty as charged”.

ModernMarvelFan

Well, now there is a reason to take Tesla private for sure!!!!

u_serious?

LMAO………so right!

antrik

Not sure how serious you comment is; but I was thinking this as well: if they SEC gets their way and Musk is banned from leading a public company, would that make investors more open to taking the company private, so he could continue leading it?…

Pushmi-Pullyu

While I am certainly not a “financial guy”, at the same time, I can’t see this being an argument likely to persuade any investor: “Hey, we know you were previously against Tesla being taken private, but now that Elon Musk has been banned by the SEC from being a corporate officer of any publicly traded company, won’t you please reconsider so he can remain as both Tesla’s CEO and Chairman of the Board?”

Hmmm… no. Just no.

Will

They would move on from him. Ask Tim Cook to come over

Get Real

Right, so he can outsource all production to China.

Great idea, especially now s/.

Dan F.

Many of the big investors are financial companies like Fidelity which are not allowed to own non public companies on their investors behalf. I think a lot more cash would have been required to go private than Mr. Musk may have imagined because those shareholders would have to be bought out.

Will

Who’s going to come up with $45 billion dollars

antrik

Banks, other companies… Basically anyone who has deep pockets and thinks the company is worth the buyout price. The bank Musk commissioned came up with a proposal within days.

Rolando

The ‘taking private’ always made a lot of sense for
(pro-1) keeping the peace from short-attacks,
(pro-2) avoid strict SEC rules what a CEO can twitter,
(pro-3) enable long term strategy without quarterly reporting pressure with end of quarterly panic

But (contra) getting Bonds and new stocks issued for a public traded company is much easier for funding.

So when you are offering to buy the 80% ($50-60 billion) from the other stockholders for a reasonable price then TSLA can go private.

Will

That’s the issue there’s no companies besides tech and media companies that have that type of monies

antrik

80% is way too high. Musk alone holds more than 20%.

groingo

The best thing Tesla could do for themselves is Elon specific….NO MORE TWITTER!

Robert Weekley

Maybe Twitter could be sued, for creating a platform with such tight character limits, leading people to think in broken, terse, sentences?

u_serious?

No. He needs to shut his face.
Take responsibility for his own actions.

Pushmi-Pullyu

Sadly, I can’t be sure you’re kidding. :-/

ModernMarvelFan

The best thing is to find a common ground with SEC and settle. Pay a large fine and then plead ignorance and drop the removal clause. That would be the best for both Elon and Tesla. The sooner the better to reduce more pressure.

Or another way is just to take Tesla private asap so even if Elon is barred and he can still run Tesla as a private company.

chano1

And in one simple stroke, an overreactive abuse of regulatory law, the SEC has answered the wishes of ICE car makers, Big oil and all the heavily committed shorts out there. They have crashed the stock by design and intent. I wonder how much payola was involved. Must have been in the tens of millions for such a sweet, massive, rescue of the shorts. How many billions in T market value did the SEC just destroy?

Seven Electrics

You’ll be pleased to hear that I found a portion of the complaint to be factually inaccurate: it plainly states Musk was a founder of Tesla Motors. Clear as day!

Will

Just like Ray Kroc was the founder of McDonalds

William

What a Kroc!

antrik

Just as a reminder, another court has ruled years ago that Musk is in fact to be considered a co-founder of Tesla.

Doggydogworld

I think that was a settlement agreement, not a court ruling. Musk and JB got to call themselves co-founders along with the three actual founders.

antrik

About 5 billion, it seems…

While I agree that SEC is overreacting here, accusing them of corruption seems seriously paranoid to me.

Pushmi-Pullyu

Yup. We certainly are seeing a lot of corruption in Washington, but I see no reason to think that extends to investigative agencies such as the SEC, despite the Orange Wannabe Dictator’s unending stream of fake news attacks on the FBI and our various intelligence agencies.

Chris O

The unprecedented speed at which SEC is moving on this is a reason for me to suspect that ulterior motives may be at play here.

bro1999

Or the offenses were so blatantly clear that the lawsuit basically wrote itself.

Get Real

So says the employee of a sleazy GM stealership threatened by Tesla’s business model of company owned stores/online ordering and service centers not trying to be profit centers.

101101

Couldnt agree more. I hope there is massive political backlash against this agency and the fools behind this case. You don’t use justice to aid criminals and harm the people doing the right thing. I think this thing blows up on them.
People should call their politicians and demand action.

Dan F.

Methinks you imagine too much, but the tweet did cost many people a lot of money. Those who sold on the price bump made money and of course are not complaining.

jim

The SEC complaint seems to be factually inconsistent and not well thought through with multiple gaping holes and contradictions. I am not going to dissect the whole complaint; however, I mention just a few points. For example SEC claims that “unless restrained and enjoined [Musk] will violate again, Section 10(b)…”. The SEC is going to have very hard time to substantiate this claim unless they can prove that the SEC was and is capable of predicting Musk’s future behavior. As such, the SEC statement is just a pure conjecture. Additionally, SEC appears to be taking side with short sellers which is troubling on multiple levels. Finally, the timeline of events leading to the 8/7 tweet, as outlined by SEC itself, only proves that Elon is very transparent with his thoughts and plans, and that his behavior is consistent with his beliefs and management style, which is hardly a crime.

Pushmi-Pullyu

Thanks for your thoughtful analysis. I wish we saw more comments like this!

Rolando

There was a settlement offered from SEC, but Elon Musk brash declined, so the case was filed.
You should never comment on an ongoing case, but Elon Musk did criticize SEC for enforcing its rules.

So do you really think that showing no remorse, no feeling of guild for violating rules, and criticizing the SEC law enforcers in an ongoing case …. are all signs that he will NOT violate the same rules again ?!?

Rolando

Update on this: rumors (Bloomberg, CNBC, etc…) are that the settlement proposal was a small slap on the wrist ($5-10 million pocket money for a multi-billionaire), also no admission/pleading guilty was requested, plus Elon could keep the CEO post.
But Elon Musk declined this generous settlement offer stubbornly in the last minute, that the SEC is playing hardball now is understandable. So instead of blaming SEC now maybe the Tesla fan-scene should consider if that rejecting this settlement was that smart.

Chris O

Reuters noted that it’s highly unusual for SEC to move so quickly with a lawsuit, usually it takes over a year to prepare. This jibes with the notion of an ulterior motive like siding with shorts or trying to disrupt the disruptor on behalf of the disrupted.

Rolando

See my post above ….. there was the SEC’s generous ‘slap on the wrist’ offer brash rejected from Musk.

Law professors asked for comment in news called it a “shut case” , the falseness of “funding secured”, announcements in mid day trading without upfront info to NASDAQ etc… is too clear, so the filing at NYC court could be that fast.

Will

Shorts are stockholders as well. Sorry if you don’t like it

TomArt

That’s the main problem – shorts and microtraders and nanotraders are all permissible, and shouldn’t be permitted in capital markets.

Pushmi-Pullyu

Ordinary short investments are considered a good influence on the market; they serve as a brake to a stock skyrocketing into a bubble. Unfortunately, the short “interest” in TSLA is so strong that, perversely, it often drives up the stock price.

And of course, we don’t see organized smear campaigns directed against companies with normal levels of short activity. Tesla seems to be alone in that kind of organized attempt by short-sellers (and others with a vested interest in seeing Tesla fail) to manipulate the stock price by spreading smear campaigns and FÜD all over social media.

antrik

Short sellers do not, in fact, hold the stock…

Get Real

Yes and this shows how un-informed and desperate Will is to see Tesla fail. What a great American he is /s.

Doggydogworld

“SEC is going to have very hard time to substantiate this claim ”

Musk SAID he did not regret the tweet. He said he won’t stop tweeting stuff like this. Courts factor in whether the act was a one time aberration or part of a pattern that is likely to recur. SEC has an easy job showing the latter.

“SEC appears to be taking side with short sellers”

How?

It’s not the Court’s job to decide if bulls or bears are right. It **is** the SEC’s job to maintain orderly markets. The SEC was specifically created to put a stop to the crap that bulls and bears both used to pull. Insider trading, watering stock, fake tenders, cornering market’s, etc.

“Transparency” is not the issue here The SEC only needs to show funding was not secured and shareholder vote was not the “only reason” the deal wasn’t certain. Slam dunk. They then must show Musk knew or should have known they weren’t true. That’s what Musk will contest, but it’s an uphill battle.

He **really** should have settled.

William

It’s not in Musk’s nature to settle! His Leagal Eagles, are probably giving him the all backup he needs, to be able to take this battle, all the way to its logical conclusion.

101101
What you dont get is this is political and there isnt going to be an un just result off a technicality. Tesla is a revolutionary company. He has made that very clear over and over again. What the SEC is pissed about is he put the petrol shill money in their proper light. That he isn’t a puppet for petrol and speaks out. That he doesn’t put up with lying petril shill analysts. They even noted the number 420 as a reference to weed. Know why they hate this so much? Because pharma is the most rarified petrol their is and weed is a product that about severs the petrol pharma pushers rent seeking cord with something will push up through your drive way cement if you let it. And replace fear filled conservative petrol slaves with laughing question less violent less isolated harder to manipulate community types. So they think they can get rid of him because he is in contempt of their oppressive BS. But Tesla exists to that kind of oppressive enslaving BS. As for the shorts, corporate criticism is fine but this is petrol fueled lie spreading to trying to drive down the stock to deny… Read more »
Speculawyer

Meh…this was a dumb tweet by a CEO/Engineer that isn’t good with Securities laws. It was wrong for him to tweet that. But this will be settled and everyone will move on.

But expect shorts to try to make this into the crime of the century.

Clive

It surprises me that you use Meh being a lawyer.

Thumbs up regardless!

theflew

That’s the problem. He should know basic securities laws. It’s not like he just graduated from high school or just became CEO.

bro1999

Rocket science is easy. Not being a narcissistic pathological liar is the hard part. 😉

G2

Walk it off Bro…

Get Real

So says the shill and employee of a GM stealership who is back to his mental carpet-bombing of anything and everything negative of Telsa/Musk because he fears for his employment and employer in a legacy company.

Speculawyer

Nailed it.

LOL, 430+ comments on this story and it is already settled. Talk about much ado over nothing.

CarGuy

Sounds like a good buying opportunity tomorrow with sales numbers coming out next week.

Nix

1) This will have no direct impact on Tesla financials, as Tesla is not a party and would not owe any fines. Tesla will still be building sweet EV’s that the market can’t pretend will go away just because of this civil action.

2) The suit calls for Musk to forfeit to the gov’t any profits he made, but doesn’t provide any support for Musk having ever made any profits on this. That is a complete oddity in a Rule 10b-5 civil case.

3) These are the allegations, not the judgement, and we have yet to see the defense. On just first read it is easy to spot contradictions in the allegations.

Craig

No Elon = No Tesla

Clive

You are correct.

Without his leadership the passion will not be the same.

Nono13

No Jobs and Apple is still there. And better than ever.

TomArt

With a hand-picked successor, yes.

bro1999

People said the same thing about Apple after Jobs died. Apple seems to be doing just fine. Tesla (may) survive without Musk, and if they do, they might actually thrive for once.

William

“Might actually thrive” is what all those Model 3 deliveries are doing “actually” today.

Tesla is the first US car company, in many many decades, to supplant a significant chunk of an existing ICE OEM market segment, with a transformative new vehicle platform, that can’t EVen satisfy existing massive consumer demand.

Thrive” is what the Model 3 and Tesla are doing NOW. Check the year end US sales score card for EVs, and Musk’s 2018 foolish misadEVntures won’t EVen rate. Tesla has the USA as it’s dominant EV sales proving ground, running Elon a massive Model 3 Victory Lap!

For the WIN!

bro1999

Where’s the profits to show the investors?

William

Patience young grasshopper, the Profits from all high, will bequeath you, and your minions, with their immaculate Angelic Profitable presence soon, in a emphatic 1H of 2019.

antrik

Apple is doint just fine in holding on the most of their market share in a particular segment of a rather mature market. Nothing like the disruptions they caused in the past, or Tesla keeps causing. This sort of “doing just fine” will be OK for Tesla a decade from now; but presently, just doing business as usual is *not* sufficient to secure their future position.

magama52

SEC timing is peculiar, 3 days from end of Q3. Trying to cloudy up the news of total sales #’s of Q3 next week. Stormy waters, yes, but the ship will keep on sailing. Just saying.

Chris O

Reuters noted how surprisingly quickly the SEC is moving on this, unprecedented. Seems to me that destruction of a company that has disrupted too many interests worth many billions of dollars rather than justice is the real goal here. Time is of the essence, Tesla is still vulnerable as long as it’s dependent on the stock market for funding operations, once Tesla starts making a profit things will get that much more difficult. The strategy appears to be working with TSLA in free fall again.

Reuters as the good little stooge of the vested interests it is like most news outlets made a point out of projecting a stock value without Elon that’s 3/4 lower than current which would be helpful in any agenda to destroy Tesla or make it vulnerable to a take over by parties that may want to curb its disruptiveness.

That said: Elon Musk did make it easy for his enemies….

Doggydogworld

SEC bent over backwards to avoid destroying Tesla. They didn’t charge the company. They didn’t charge anyone on the board, not even Kimball. They didn’t charge Deepak, though he sat in on part of the Saudi meeting and assisted Musk post-tweet instead of trying to rein him in. The SEC offer allowed Musk to remain as CEO. It did not include an admission of wrongdoing which shareholder plaintiff lawyers could use to seek damages.

Former SEC chairman Breeden said it best – the SEC put a ladder up to the limb Elon had climbed out on.

And Musk clawed them in the face.

Benz

His initial plan was to take Tesla private, but after listening to the opinions of several shareholders he had canceled his plan.

Would the SEC also have decided to take this action if Elon Musk would not have decided to cancel the initial plan to take Tesla private?

Will

There’s was no deal .

Ron M
Benz

Elon Musk decided to cancel the initial plan to take Tesla private.

The Saoedi Fund had been asking Elon Musk to take Tesla private (several times in a period of almost 2 years). They had decided to make investments in Tesla. But in the end they were left empty handed. Too bad for that Saoedi Fund.

The cancellation came from Elon Musk, because he backed off (after talking to several shareholders). Otherwise there would have been a deal.

The Saoedi Fund wanted it badly, but they didn’t get what they wanted.

Doggydogworld

We don’t know what the Saudis said. They wanted a Gigafactory in Saudi Arabia as one condition of the deal. They did not discuss price, shares were $298 the day they met. There was no written commitment, no MOU, nothing. Just an indication of interest.

If musk had been honest about that and everything else in his tweets the stock would have barely budged.

Will

The Saudis saw how sketchy and they said f this I’m going to invest in a startup

G2

That’s just lame Will.

Will

It’s not lame it’s truth. Who did the Saudis invested in ? Not Tesla but Lucid

Doggydogworld

They invested in both.

Pushmi-Pullyu

Of all the ill-informed comments speculating on what actually happened in this discussion thread, I think yours takes the prize. 🙄

Will

The Board is deeply Delusional. Sorry it’s your fault for not reigning his Twitter handle and providing a right hand man to handle some of the load

Ron M

I read an article this morning that said the SEC and Musk were close to an agreement where Musk and Tesla would have to pay a nominal fine and Musk could remain the CEO.
However Musk decided at the last minute to not sign the agreement.
So the SEC goes from a nominal fee and Musk remains, to a fine and Musk is out. Seems like the SEC first reaction was fair and because Musk didn’t accept it. The SEC decided to hang Musk for not agreeing.
Maybe Musk’s lawyers can get the SEC to provide that deal again.

bro1999

His ego won the war between it and his brain.

Ron M

https://a.msn.com/r/2/BBNF0J4?m=en-us&referrerID=InAppShare

Read this SEC had ordered a much milder penalty.

bro1999

Yep, but would have required Musk step down for 2 years as CEO and make the company appoint 2 independent directors.
Musk’s narcissistic self couldn’t accept that, so now he’s risking losing it all. What a dumbass.

William

The only Muskian “step down” we will EVer see, is when he climbs out of the Tesla Semi, and has to get back to ground level!

Ron M

The article I posted said Musk would not have add to step down.

https://a.msn.com/r/2/BBNF0J4?m=en-us&referrerID=InAppShare

101101

You don’t step down in a fight because some criminal shorts got burned while commiting what amounts to obvious crimes. Tesla doesnt exist to make monet for fools. He told the day traders to get out that there would be volitility. All this stupid rent seeking wall st crap has been in the way but the products are still the best by a order of magnitude. Think about Jobs and Buffet on thes non contributing back seat drivers.

Doggydogworld

What about the long who believed he wouldn’t lie about something like that and bought from 360-380? Doesn’t he owe them some consideration?

Doggydogworld

Step down two years as chairman, but remain as CEO.

Everyone says he should have taken the deal. Even a longtime friend who kept calling him America’s greatest CEO on CNBC said he should have taken it. Musk’s lawyers clearly advised him to take it and he agreed until backing out at the last minute.

Hubris on steroids.

ModernMarvelFan

He may still be able to take that deal before the court decides.

Jim

In the end when this drama is all done and over with, the most likely outcome will be very close to the original deal. Elon remains CEO plus some nominal fines.

ModernMarvelFan

The rumor said that settlement was a fine, removal of Elon as Chairman of the board for 2 years. Add two independent board members to the board and “no admission of guilt”. It was almost a done deal and Elon decided to walk out at the last second.

I am not surprised as Elon is one of those “bet the house” kind of guy.

Kimmo57

This is good news, as I was able to buy more shares for cheap. The price will bounce back in a few days, once the quarterly results come out.
I think Elon will be fined at most.

B.T

Certainly not with SEC on this, maybe Elon shouldn’t have tweeted, and I am not alone on this issue.

Madan R

Thanks to ELON MUSK’s leadership, Tesla sold 25,793 vehicles in 2018-08 and 115,631 vehicles in 2018-YTD to take the World #1 title and keep the star spangled banner flying high.

Elon Musk tried to take the company private, but could not because of lack of funds. What’s wrong in trying. Probably vested interests showed interest and backed out later.

Had he feared to invest in Tesla, there would not be so many clean electric vehicles running in America’s road or World’s roads.

I think once again he can try taking the company private and there will be many environment conscious citizens of the World and the proud Americans who will come forward to invest in his company in means other than equity.

101101

There was no lack of funds it just had some of the wrong entities trying buy in to scuttle. VW for instance. VW still has its diesel gate CEO as CEO even though he is in prison.

Benz

Suppose that Elon Musk had not cancelled the initial plan to take Tesla private.

What would the SEC then have done?

William

An interesting “not cancelled” hypothetical scenario to consider, but the SEC now has to flex some of their muscle, as they have done so in the past, with other Wall Street insider transgressions.

The SEC is going to try and take its proverbial “Sub”, and demonstrate to Elon what “stick it where it hurts” really means, when it comes to fines and penalties.

antrik

This has nothing to do with insider trading.

William

“Trading” is not transgressions. It’s a bit different when these dissimilar things are taking place, in and around Wall Street.

Milfan

If Tesla falls, then BYD, BAIC and other Chinese companies are going to take over the leadership of not only electric vehicles, but the whole world of transport.

Perhaps if Germans join the EV fray, then the rout of the American automakers will be complete. BMW, Benz, VW group has shown their EV while the GM & Ford has not shown any vehicle and Bolt/Volt are only low volume vehicles.

This whole settlement is probably backed by Shorts, big-oil, automakers.

One more attempt should be made to take Tesla private and end all the issues with SEC, shorts, etc.

Bennyd

Really, time to partner with Apple. From a business standpoint Tesla needs stability now.

Milfan

From selling 19,157 vehicles in 2018-06 to 20,576 in 2018-07 to 25,793 vehicles in 2018-08 has brought Tesla to bigger limelight. Obviously the wall street does not like and are trying all they can to stop them before seeing the shock of 2018-09 sales.

I think this whole thing of taking private is conspired by the Saudis offering support to Tesla and than backing off so that SEC and shorts can file a lawsuit.

Hope Musk gets more alert and not to trust any help from oil companies.

Also he should not tweet unnecessarily against those who oppose electric vehicles. From now on every month, Tesla will increase the sales, achieve sales increase over some existing model like Chevy-Bolt, Ford-CMax plugin, Toyota Prius plugin and they just talk about this to keep the excitement going on.

Benz

“I think this whole thing of taking private is conspired by the Saudis offering support to Tesla and than backing off so that SEC and shorts can file a lawsuit.”

The Saudi did not back off.

Elon Musk cancelled the plan to take Tesla private.

The Saudi’s were left empty handed.

Doggydogworld

The Saudis never even talked to Musk again.

antrik

The filing mentions the talked again on August 10th?

Milfan

What if Elon Musk decides to move Tesla headquarters from Fremont, California, USA to Shanghai, Jiangsu, China and moves as much staff and materials to that country and start production there.

That will help China rocket in EV sales and leadership while the EV sales and industry will hit a rock bottom in USA.

Chinese government and people would love it.

Will

No they would arrest him.

Andy

What does that have to do with breaking securities laws though?

Giving someone a pass for (allegedly) breaking the law because you like what they’re doing, or because they’re doing something you see as positive to the country is not how the law works.

If he broke the law the SEC need to make sure he is held accountable, otherwise they may set a precedent and make the law not worth the paper it’s written on.

Blame the law, not the SEC for Musks (alleged) law breaking, if you don’t want to blame Musk himself for not following it.

GE

By all means, Trump’s SEC should take Elon down hard. The nerve of that guy thinking he can create whole new industries that compete with vested interests in old industries. Get this, he thinks he can save humanity by driving the transition to electric transportation and renewable energy with storage. What a dreamer! Full disclosure: I have an M3 and some Tesla stock.

bro1999

How can he “save humanity” when he can’t even save himself.

GE

Correct! No One can save humanity by themselves. He’s working hard to give humanity the option to save itself. It looks like he is so committed to this that he’s not taking good care of himself. Save Elon!

Brian

Anyone else think that Shorts will cover today? Last day of the quarter and last day before we find out if Tesla delivered 55k Model 3’s? Coincidence?

Pushmi-Pullyu

I’m sure a lot of them will take the opportunity of the temporary downturn in TSLA stock price, and sell off their position before the stock price inevitably rises again. If Tesla shows a significant quarterly profit — and there seems to be a very real chance it will — the shorts will be put thru yet another “short squeeze”, and possibly a bigger one than ever before.

What I have never understood is the investment strategy of shorting TSLA as a long-term investment. So far as I can see, that’s absolutely guaranteed to lose money. Those people are literally betting on Tesla to not merely falter, but actually fail. With the now runaway success of the Model 3, it’s virtually guaranteed that won’t happen at least for a few years. Even if Elon Musk were to vanish into thin air tomorrow, that wouldn’t stop Tesla’s runaway success with the Model 3.

And yet, I think that some of the more prominent anti-Tesla FÜDsters, such as Mark B. Spiegel and “tftf”, will hold onto their short positions. It appears some people are incapable of learning.

Another Euro point of view

IMO shorts believe that if profit there is for Q3 it be will small and essentially fabricated using ZEV credits income. Anyway that it won’t be a sustainable profit situation.
I agree with them on that but not on other aspects of the usual short thesis like absence of long term demand for Tesla cars.
Now it could well be that they covered yesterday but that the selling by institutional investors was so huge it could not be noticed.

Milfan

Tesla achieves Model-3 production goal of 50,000 in Q3 with 2 days to spare.
Today is a merry day for anti Tesla crowd.
Everyone are waiting for Tuesday to get all the #.

https://electrek.co/2018/09/28/tesla-model-3-production-goal-achieved-record-quarter/

Another Euro point of view

So rule of law applies also to billionaires in the US ? I did not believe that would be case. I am pleasantly surprised and that is good news for the civilized world. It is in deep need to acknowledge that the US is not equal to Trump, that this country is mostly populated by decent hard working people who do not like being lied upon.

Andy

Some of the conspiracy theory and hero worship in the comments section is eye opening (not in a good way).

Pretty depressing really.

Pushmi-Pullyu

Not as depressing as Elon bashing by those very clearly jealous of his many successes, his visionary abilities, and his great wealth. Elon accomplishes more in one day than those eaten up by jealousy will in their entire lifetime.

Get Real

If serial anti-Tesla Andy was talking about Trump and the Brietbart crowd he might have a point.

William

Darn it, You beat me to comment #420,
Get Real … Comment Secured!

EUEV

First they have to test in court I’d Twitter is consider a publication, if so the president should be in jail long time ago.

Sy Gung Ho

Here is what I predict is going to happen. A few days before the case goes to trial, Tesla will go private for a price of $420 or more. The case will then have to be dismissed. Musk must know this will happen so that is why he passed on the settlement. Wait can, I say that? Can the SEC file against me for this comment? Good thing, I didn’t use my real name.

Anyway, what everyone has missed in all of the comments is that the only reason why Tesla did not go private was because there was an obscure rule that prevented taking the existing shareholders along and Musk wanted to be loyal to all shareholders. Funding was secure because most shareholders would hold on, so very little funds were needed. Will they fine him so heavily for not knowing this rule? I don’t think so.

Benz

“Tesla CEO Elon Musk believes he had a verbal agreement from the Saudi sovereign-wealth fund to finance his go-private plan, The Wall Street Journal reports — a potential preview of how he’ll defend himself against SEC accusations of fraud.
• The SEC claims Musk “knew that he had never discussed a going-private transaction at $420 per share with any potential funding source.”
• Musk’s stance is reportedly turning on an assumption by regulators that a written agreement and fixed price are necessary for a deal — and he believes regulators aren’t sufficiently appreciating how Middle Eastern businesses routinely operate on verbal agreements, according to the report.”

There was a verbal agreement with the Saudi’s.

William

Comment # 421
Once again late to the party,
Chronic Secured!

Another Euro point of view

Just read the SEC complaint in full and watched the SEC press conference. IMO we can already start to guess who will be Tesla’s next CEO. No way that he remains.

K A Cheah
THIS SEC’S SUIT IS FILED ON THEIR ANGERS ON THE SAME DAY THAT THEIR OFFERS TO ELON MUSK & TESLA WERE REFUSED, AND ALSO ON BEHALF OF THE SHORTS THAT SUFFERED HUGE BURNS AS THIS IS VERY UNFAIR TO THOSE PIONEERS LIKE ELON MUSK THAT HAS THE SUBSTANCE TO CREATE NEW ADVANCED HIGH TECHNOLOGY THAT CAN DISRUPT THOSE HUGE BIG OIL INDUSTRIES & ICE COMPETITIONS THAT TRIED TO OPPOSE HIS EVERY ENDEAVOR & INITIATIVES AND AS WELL AS HIS MAKING THE WHOLE WORLD ELECTRIFY SUSTAINABLE MOBILITY AND TRANSPORTATION SECTOR FOR LAND, SEA , AIR AND SPACE. ALSO THERE IS NO EVIDENCE THAT ELON MUSK BY TWEETING THAT “420, FUNDING SECURED” HAS HAD COMMITTED ANY OFFENSE AS HE HAS THE CAPABILITY TO TAKE TESLA PRIVATE IF HE INTENDED TO EXCLUDE THOSE SUPPORTIVE EARLY INVESTORS THAT HAVE LIMITED CAPACITY BY THEIR COMPANY’S OWN REGULATIONS TO INVEST IN A PRIVATE COMPANY SIMPLY AND ELON MUSK IS MAGNANIMOUS NOT TO PROCEED ON TAKING TESLA PRIVATE IN CONSIDERATION OF THE PREDICAMENTS OF THE TESLA’S SUPPORTIVE EARLY INVESTORS RIGHT & SIMPLY OK? IF THE CASE IN POINT OF A FRAUD BEING COMMITTED IS REALLY OUTRAGEOUS OF AN ACCUSATION BY SEC THAT HAS LOST THEIR PERSPECTIVES IN… Read more »