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SEC Charges Elon Musk With Fraud Over His Statements To Take Tesla Private (bloomberg.com)
U.S. securities regulators have sued Elon Musk for allegedly making false statements related to his abandoned efforts to take Tesla Motors private. Bloomberg News broke the news Thursday, citing docket entry in Manhattan federal court. Last month, Musk had expressed his intentions to take Tesla private, and that he had secured the funding. Taking Tesla private, which would have helped the company avoid making short-term commitments and goals, would be the "best path forward," Musk had said at the time. Even as investors had shown agreement to Musk's move, a few days later, he announced that after further discussions, everyone believes that Tesla should remain public. Amid all of this, some argued that Musk made the "false" claim just to hurt short-sellers. From the lawsuit: This case involves a series of false and misleading statements made by Elon Musk, the Chief Executive Officer of Tesla, Inc. ("Tesla"), on August 7, 2018, regarding taking Tesla, a publicly traded company, private. Musk's statements, disseminated via Twitter, falsely indicated that, should he so choose, it was virtually certain that he could take Tesla private at a purchase price that reflected a substantial premium over Tesla stock's then-current share price, that funding for this multi-billion dollar transaction had been secured, and that the only contingency was a shareholder vote. In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source. During a press conference, Stephanie Avakian, co-director of the SEC's division of enforcement, said: A chairman and CEO of a public company has important responsibilities to shareholders. Those responsibilities include the need to be scrupulous and careful about the truth and accuracy of statements made to the investing public, whether those statements are made in traditional forms such as a press release or an earnings call or through less formal methods such as Twitter or other social media. Neither celebrity status nor reputation as a technological innovator provide an exemption from the federal securities laws. In a statement to CNBC, Musk said, "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."
Wouldn't it be delicious if this derailed humanity's path to the stars long enough that we didn't make it as a species?
I honestly can't think of a worse group of folks than financial lawyers, or a better group of people than SpaceX.
A government is a body of people notably ungoverned - AC
Slashdot article is wrong. It's only against Musk, not Tesla. As longs have been pointing out for ages that it would be, while shorts kept insisting it would be against Tesla. He's also not been charged, he's been sued, in a civil case. "Civil Action No. 1:18-cv-8865"
But come on people, get that price down! I've got dry powder and it's right before the Q3 deliveries numbers ;)
Sued is worse than criminal charges. If found guilty, and given that this happened in a public forum, he will be, the SEC has the potential to ban him from running a public company, just like they did to Elizabeth Holmes. In addition, they can fine him sufficiently high enough to force him to sell Tesla stock to meet the fine, if he doesn't then he goes to prison in contempt of court. The result is the SEC has the power to remove him from Tesla completely.
And despite your corrections, Tesla has had 3 class action lawsuits filed against it related to the stock tweet, 2 from short sellers and one from a long-position buyer who trusted Musk that the stock woudl be bought at $420, and bought in when the stock was low. https://www.wired.com/story/wildest-lawsuits-tesla-right-now/
So I would hold off on your Tesla stock buying right now. They are not looking like a winning bet anymore.
I'm honestly not sure how to play those delivery numbers now. I was fixing to jump in for the expected 10% plus jump (trader here, no long investments with a recession in the wind). But, I'm in the camp that believes that Tesla without Musk at the helm will be just another car company instead of a company headed for a full vertical stack business in Transportation as a Service that is the only thing that can justify it being amongst the highest valued companies. To be valued in the $50+ billion range at this point in its life can only be justified by an expectation of a value that is a multiple of the top car company in the world in the decade out time frame because values don't stay flat while the company grows to its target.
Without his dynamism, they may not fail, but they will only succeed in having sparked the transition to electric, not in the more far-reaching task of rewriting the automotive business model which likely has another 15 years to critical mass. He also badly needs a Tesla worth several times more than today to gain the finances he'll need for Mars at about that same 15 year time frame. He needs a Tesla providing a few hundred billion miles a year of TaaS.
The SEC has to be very careful here because in punishing Musk for a 10% increase that hurt a few minority shorts, they could spark a 50%+ decrease that would be of far greater total monetary harm to the majority longs.
Many of the older, calmer investment experts I've read comment on this battle from the POV of experience say that the SEC will talk big but balance what they do to Musk with concern for their own potential of causing more damage than the momentary glitch Musk caused. 10% increases and decreases in Tesla are an expected norm. I personally consider the stock to be unchanged from a long-term POV as long as it stays between about 250 and 370. It is that volatile.
They still incorrectly state "charges". They've sued Musk in a civil case.
So? You can sue criminals for crimes in a civil case if the prosecution declines to engage in a criminal case.
I've done this in the past with an ex-wife who kept obstructing my son's access to me: the prosecutor basically blew me off and said deal with it, so I filed a civil suit seeking a finding of guilt of a crime.
She got a 3 month sentence (contempt of the visitation order), plus the opportunity to pay me back my legal fees.
You aren't as clued up as you think you are. You're very passionate about Tesla, but passion doesn't mean you know what you are talking about.
I'm a minority race. Save your vitriol for white people.
No, dipshit.
Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. 78j(b)] and Rule 10b-5 [17 C.F.R. 240.10b-5] thereunder.
In no place does it say 240.10b-5(b).