Elon Musk mocks United States financial watchdog after settlement

Andrew Cummings
October 5, 2018

Just days after settling with the Securities Exchange Commission, Tesla CEO Elon Musk took to Twitter to troll the SEC on Thursday.

Tesla shares fell as Elon Musk mocked the U.S. financial markets watchdog on Twitter, describing it as the "Shortseller Enrichment Commission".

The statement by the electric automaker's CEO alludes to "shortsellers", investors who have bet that Tesla shares will fall and who are frequently the subject of Musk's derision.

However, the next day, Tesla's attorneys were back at the SEC requesting them for a second chance, this time with Musk's "grudging approval", the paper said. "One Barclays analyst told CNN that shares in Tesla carry a "$130 Musk Premium" which would evaporate if he were deposed.

On Sept. 27, the SEC charged Musk with securities fraud, alleging he misled investors in tweets about taking the company private.

While the board has not engaged in any "serious" discussions of who should be the chairman, some members of Tesla's board of directors have proposed 21st Century Fox CEO James Murdoch take over the role of chairman following Elon Musk's settlement with the Securities and Exchange Commission.

Among them was Nathan's colleague Jed Rakoff, who had objected to the SEC's decades-old policy of letting some corporate defendants settle without admitting or denying wrongdoing, as Musk did.

The tweet ends with "the name change is so on point", which appears to be a reference to the SEC - mocking the agency. Under terms of the settlement, Tesla and Musk will each pay a $20 million fine, and Musk must give up his role as chairman.

Musk's sarcastic tweet could cause Nathan to reject the settlement if it gives her reason to believe that he "has no intention or ability to change his conduct", said Erik Gordon, a business professor at the University of MI.

Shares of Tesla extended earlier losses after a judge issued an order to review the settlement, and were down $12.97, or 4.4 percent, to $281.83 at the closing bell on Thursday.

While Musk wanted to fight the SEC, he reportedly had a change of heart when Tesla's stock plummeted almost 14 percent after the lawsuit was announced. Musk said on Twitter.

Musk has kept up his cryptic ways this week, tweeting out a music video by rap group Naughty by Nature for their 1991 hit song "O.P.P". "The vast majority of settlements like this are approved by courts". 'This is just a hoop to be jumped through'.

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