Judge Approves Musk & SEC Settlement

Tesla

OCT 16 2018 BY DOMENICK YONEY 18

Settlement secured

It looks like the “considering going public…Funding secured” saga may finally be in the rearview mirror of Tesla. Today, a judge approved the settlement that CEO Elon Musk and the U.S. Securities and Exchange Commision (SEC) had hammered out after the agency named the entrepreneur as a defendant in a lawsuit.

In case you’ve been on a trip to Mars or something, Musk had, in August, tweeted out that he was considering taking Tesla private at $420 a share, and that the funding was secured for the deal. The stock valuation shot up quickly enough for the NASDAQ to halt trading for a bit. The sudden price movement angered many with short positions in the company and they complained in great numbers to the SEC.

Eventually, it became clear that the funding wasn’t as secure as the tweet had intimated and the SEC began an investigation that resulted in charges being brought. The case was settled, after some last minute drama, out of court and the two sides came to an agreement.

The episode has, overall, been hugely damaging to the California automaker’s valuation. Though it rose almost five percent on news of U.S. District Judge Alison Nathan’s decision, its market capitalization now sits at 46 billion, whereas previously it had been over $52 billion.

Neither Tesla nor the SEC would comment today on the story. The settlement requires Musk to step down as Chairman of Tesla’s board for at least three years and requires the company to bring on an additional two independent directors. Both Musk and the company will pay $20 million each, which will be distributed among the short sellers who have claimed damages.

For a quick recap, we’ve embedded a video clip from CNBC discussing the development.

Judge approves Tesla CEO Elon Musk’s settlement with SEC from CNBC.

Source: CNBC

Categories: Tesla

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18 Comments on "Judge Approves Musk & SEC Settlement"

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amt

We should All Learn A BIG Lesson From this Huge $40 Million Dollar Total Payment, As a Result of a Few Misplaced Words…. That is., ” Engage Brain” , ….Before…. “Running Mouth”……

Ron M

Well I’m glad this distracting is over, I really hope that Murdock doesn’t become the Chairman. I really don’t want him as a director. Musk should look at some of the people who left. Maybe the circumstances for there leaving have changed and obviously Musk would know there feelings about Musk and Tesla’s.

ModernMarvelFan

It is finally over. Time to move on. Focus on the business now!

Doubting Tomas

Despite what the article said, it’s not even close to being over. This is just the tip of the iceberg. The $40 million payment to shareholders (longs and shorts) who suffered loses as a result of Musk’s misleading tweets is but a drop in the bucket with regards to the actual loses they suffered, which are in the billions of dollars. Multiple class action shareholder lawsuits have been filed against Tesla and Musk.

These shareholder lawsuits and Tesla’s potential liability will weigh down Tesla’s share price until these lawsuits are resolved. An example of this is what happened to Porsche after its ill-fated attempt to takeover Volkswagen. Porsche is currently being sued for $6.2 billion by shareholders for alleged market manipulation of VW’s stock in October 2008. The lawsuits have dragged on for a decade and Porsche’s stock has performed badly since the lawsuits were launched.

101101

This is just wrong, shorts have been manipulating the price and will be burned.
What happens next is Tesla price goes through the roof over model 3 out selling Camry before the end of the year.
And I hope what happens is Musk and Tesla go after short and distort petrol fronts criminally and civily. Hope Musk and Tesla can get the next admin to go after the shorts. What the SEC should have been doing is prosecuting the short and distorts not colluding to damage the share value.

Doubting Tomas

@101101

I can’t tell if you Tesla fanboiz are delusional conspiracy nutters or just immature 12-year olds. Which one are you?

Dave100e

Right, so what you’re actually suggesting is that Musk and Tesla, who have actually committed an offense here, should worry less about building cars and concentrate all of their efforts on somehow getting one back on the people who are simply doing their job and using the system that they work within? Are you on Heroin or something?

I don’t get the obsession with shorts. It’s part of the stock market. It doesn’t matter what industry you operate in, if you enter the stock market you will get shorted. It is how the system works, It’s not personal, it’s people trying to make money and when things don’t go their way they will do what they can to change that. It’s the nature of the stock market and is no different to buying shares in the hope they increase in value. Will people please just grow up and get over this?

Will

Porche don’t have stocks

Doubting Tomas

You’re wrong Will. Porsche Automobil Holding SE, usually shortened to Porsche SE, is traded under the symbol PAH3 on the Frankfurt Stock Exchange.

http://en.boerse-frankfurt.de/stock/Porsche-share

https://en.m.wikipedia.org/wiki/Porsche_Automobil_Holding_SE

Pushmi-Pullyu

“Despite what the article said, it’s not even close to being over.”

It’s over. Now you need to get over it.

If you are stubbornly determined to be a serial Tesla basher, despite the fact that Tesla is now very clearly a runaway success, then at least find something to whine about that is current. Whining about last month’s news isn’t going to change anyone’s opinion; it’s merely annoying.

Doubting Tomas

Pushmi,

🤦🏻‍♂️🤦🏻‍♂️🤦🏻‍♂️

Are you daft or did you only read the first sentence of my comment? 🤷🏻‍♂️ I suspect it’s the former, if not both.

It’s not over because Tesla is still on the hook for BILLIONS of dollars!!!!! The shareholder class action lawsuits are an open and shut case. Long and short investors lost billions of dollars, and Tesla and Musk will be found liable for their loses.

Pushmi, you’re like a ostrich who buries his head in the sand whenever he hears bad news about Tesla. Denial isn’t a river in Egypt, it’s what you do to cope with bad news about Tesla.

Below is an article about how class action shareholder lawsuits over Elon’s “funding secured” tweet could cost Tesla BILLIONS of dollars.

https://bgr.com/2018/08/16/elon-musk-funding-secured-tweet-cost-tesla-billions/

Doubting Tomas
Pushmi, In case you’re too lazy or scared to click the link in my comment above, here is the article in full. Lawsuits over Elon Musk’s ‘funding secured’ tweet could potentially cost Tesla BILLIONS Yoni Heisler August 16th, 2018 at 10:30 PM Early last week, Elon Musk took to Twitter and said that funding to take Tesla private at $420/share was secured. In the wake of Musk’s tweet, Tesla shares immediately jumped by more than 10%, effectively putting some serious pressure on Tesla short sellers in the process. As we would later find out, funding for Musk’s plan was not, in fact, secured in any sense of the word. Before long, accusations that Musk engaged in blatant stock manipulation began making the rounds. Not surprisingly, the bizarre tweet put Tesla’s mercurial CEO in hot water, with the SEC last week even launching a preliminary investigation into the matter. The SEC, though, could be the least of Tesla’s worries. According to Charles Gasparino of Fox Business News, Tesla board members are far more anxious about what a deluge of class action lawsuits against the company would mean for the company’s bottom line. Gasparino notes that Tesla’s legal team has determined that… Read more »
(⌐■_■) Trollnonymous

20mill is a slap on the hand, just as I expected.

zzzzzzzzzz

Securities fraud does pay 🙁

The funny thing is that shorts who were intended to be burned profited handsomely from the TSLA drop after “funding secure” tweet, from $370 to $250, and Tesla or EM will need to pay big settlements to class that was trading the stock after the tweet as well.

Doggydogworld

Some shorts covered, at least partially, as the stock ran up to 380+. So Musk did burn them, though it was hardly the burn of the century. And they may recover a little from the lawsuits.

ffbj

They are getting singed today with the stock rising over 6%.

ffbj

I advise shorts to cover. Or you’re going to get burned.

Will

Ok lets move on