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Elon Musk Pulled Out of Settlement With SEC At Last Minute (cnbc.com)
Sources have shared some new details with CNBC relating to the recent SEC charges against Tesla CEO Elon Musk. Yesterday, U.S. securities regulators sued Musk for allegedly making false statements related to his abandoned efforts to take Tesla Motors private. Now, according to CNBC, Tesla and the SEC were close to a no-guilt settlement but Elon Musk pulled out at the last minute. From the report: Under the deal, Musk and Tesla would have had to pay a nominal fine, and the CEO would not have had to admit any guilt, the sources said. However, the settlement would have barred Musk as chairman for two years and would require Tesla to appoint two new independent directors, CNBC's David Faber, citing sources. Musk refused to sign the deal because he felt that by settling he would not be truthful to himself, and he wouldn't have been able to live with the idea that he agreed to accept a settlement and any blemish associated with that, the sources said. Musk called the SEC's allegations "unjustified" and that he acted in the best interests of investors. "Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful U.S. auto company in over a century. Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders and employees," said Tesla's board of directors in a statement.
Rockets.
Slick Cars. (in space)
Big Drills.
Flamethrowers.
Playing Chicken with the SEC.
Do I see a thrill junkie?
Musk has good ideas. His companies do some cool shit.
He is loosing it.
He should have taken this deal.
-no admission of wrongdoing.
-minor (for a billionaire) fine.
-step down as chairman (can remain as president/CEO) for 2 years.
-appoint 2 independent board members.
That is not a bad deal. It is a very slight slap on the wrist.
Of course, there will be a different deal negotiated... but in the mean time the company is suffering due to the publicity generated by this misstep.
"You want to know how to help your kids? Leave them the fuck alone." -George Carlin
There is no chance that that would happen in this case. The trial judge could do it, I wouldn't put it past anybody at that level, but it would get tossed on appeal. That's just a negotiating tactic, not a real punishment.
Check out Albert Dunlap and John Schiller, both permanently banned from holding an executive position in publicly traded companies due to fraud and fiscal issues (like stock manipulation). They can, and have, gotten CEOs and senior executives banned from holding director positions - and Musk is running a big risk of that happening to him.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
get out of the way or die
funny thing is, thatâ(TM)s what those of us who shorted Tesla were betting on. :)
If Elon had actually secured the funding, he could make Tesla a private company.
If Elon had actually secured the funding, he wouldn't be in trouble with the SEC.
If Elon wasn't in trouble with the SEC, he wouldn't need to make Tesla a private company.
First, IANAL. With that said...
This is a civil action, not a criminal one. Thus, even if he loses Musk does not become a felon and (I'm pretty sure) doesn't lose the security clearance that he needs for his SpaceX activities.
The SEC can ban him from serving as CEO or chair of a publicly traded company; they can remove him from top spot at Tesla, but not from SpaceX which is privately held.
Contrary to what many imagine, Tesla would not implode without Elon Musk. He probably thinks it would, because monumental ego, but he's wrong. Tesla is already set up to be a gold mine, a money-printing machine. It's not just the Model 3 that's on track to be profitable, but also the utility-scale battery storage systems. They haven't got a lot of press, haven't generated much drama, but since the facility in Australia proved wildly successful, demand for those is going to explode.
If this investigation causes the stock to tank, I'll call it a great opportunity to buy in.
He committed fraud, black-letter regulation, that everybody and their dog knows about. I am not a business executive, I know all about it.
What you are saying is that since you think he's a cool guy, the law just doesn't apply,
You can side with anyone you want.
But it looks Muskeg will have much more time to micromanage Spacex and Boring Co.
Here's a great stock tip for you all: go long on Sanofi-Aventis (the creators of Ambien).
Somehow I think a lot of Ambien-Tweeting is in the cards.
Forgot to add...
I believe the SEC will also need to prove that Musk *intended* to manipulate the stock price with his dumb tweet. (There's no law against just being dumb.) I don't think Musk actually was trying to manipulate the stock, and how they're going to make they're argument I'm not sure. This may not be the slam-dunk that some people expect.
Furthermore, the SEC action may cause far more upheaval in Tesla's stock price and more harm to investors than the incident they are suing over. Is that really sensible? But you know, they want to make an example... They've said as much. This is about regulatory muscle-flexing and generating headlines.
He committed fraud, black-letter regulation, that everybody and their dog knows about. I am not a business executive, I know all about it.
Really? You know all about it? Then by all means, tell us precisely who he was talking about when he said he had secured funding, and why you personally know (not believe, but know, the two are different) that it was a lie? Or really, go write an article on the subject and submit it to various news outlets, I'm sure someone will be happy to carry it.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
any ?'s
We all know that this is a regulation. I have no idea whatever manipulation he was attempting.
What happens if this SEC civil lawsuit brings down the Tesla stock price to the point where Musk and others are able to more easily take the company private? Will the SEC investigate itself for stock manipulation? A truly entertaining possibility.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." - H. G. Wells
I think it was back in December we stockholders got asked to approve a whopping great compensation package for Musk. To collect it I think he had to stay on as CEO for a certain amount of time and hit certain financial milestones. I think it was 10 years.
So if he takes this SEC "deal" and has to step down as CEO would he lose all that? I think so.
And I think it is bullshit. Imagine what would happen if Musk left. Nobody but the shorts (who are desperate for this to happen) would win because the stock would dive 40% minimum.
And I don't see what Musk did wrong. He said he had a deal. He never said he was taking it which would have been a board (and possibly stockholder) action anyway. The SEC is being totally arbitrary. Let them take it to court if they want to be embarrassed.
If hes an idiot then why are you not a self made billionaire?
Only the State obtains its revenue by coercion. - Murray Rothbard
Never fuck with Big Business and Big Oil, or they will use their White House shill (the SEC) to shit all over you. It was just a matter of time.
Trump wants charismatic industry leaders to kowtow.
Read Mussolini's own writing. Trump did (really, he kept it in his bedside stand).
At one point in time il Duce was revered by the world for the fascist economic miracle.
Mussolini called it "corporatism". The governing paradigm is the state selects an elite set of corporate power brokers who receive favor, such as continuing to breath air, in return for supporting a benevolent patriacial dictatorship that masquerades as a democracy with a permenantly re-elected supreme leader.
it actually worked well up until Mussolini decided to invade Ethiopia and hitler copped his game plan. Then it went to shit for him.
Musk is the demo to all the other corporate charismatic leaders that you will pay if you don't kow tow to il Cheeto
Some drink at the fountain of knowledge. Others just gargle.
Can tromp their jackboots through these companies and remove the idea guy and cause them to implode. They don't seem to realize that he's really Tony Stark. Well, Tesla, SpaceX, Boring, etc. were all nice-to-haves, but will expect them to all go TU after the gov't figures out a way to whip him into a super-max for a few not-well-thought-out words in a tweet. Maybe they think he's some kind of D'nish D'Souza or somesuch. Persecution at the hands of big gov't I think to be becoming the norm rather than the exception.
[massive amount of nutjob rantings snipped]
The precedents and rulings already exist - SEC regulations have the force of law.
Um, how about bullshit? A sovereign wealth fund agreed to talk about negotiating a deal that would fund taking Tesla private - but it doesn't appear to have gone any further.
Transparency requires telling the truth - Musk did not tell the truth. He did not have funding secured.
Forcing two additional members into the Tesla board of directors was the real goal, and goes way beyond a slap on the wrist. I suspect this was the deal breaker for Musk.
If the SEC were punishing Musk, why in the world would they insist on placing their own board members? Was this really about punishing Musk, or was/is it a government takeover attempt?
You are comparing Elon Musk, who may have or have not exaggerated how "secure" his funding was in that tweet, which might have made a few shorters (i.e. gamblers not interested in health of companies) close their positions, to people who went into serial fraud for personal gains.
At the same time, no-one from those that caused the last recession had any kind of punishment...
Kinda. It would not be a forever thing, but banned from being a C-level guy at any publicly traded company? Very possible.
Note that he could still be a consultant, or a less-then-C-level-guy, but that's not exactly the kind of role he likes, is it?
over a decade ago I got a traffic ticket that was (in my view) bullshit. I didn't take it to court since, as a contractor, the hours lost would have cost me a lot more than the fine. Years later I can still feel pissed about that ticket.
You're probably right that taking the settlement would have been the rational thing to do. But I do understand him.
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Transparency requires telling the truth - Musk did not tell the truth. He did not have funding secured.
I call bullshit on your bullshit. You have no idea what sort of private conversations and handshakes were made. And by your statements here, you've already tried and convicted him.
Elon Musk said specifically that he was "considering" taking Tesla private, not that he had decided, or that it was a done deal. The SEC lawsuit is baseless and should get tossed.
Elon Musk does not play by the rules. He's taken on big oil. big auto, and big aerospace, and he's taken their business. That's what this lawsuit is about - placing government puppets on the Tesla BOD and preserving the status quo.
The exact same thing happened when Jack Northrop started taking contracts from Convair (absorbed by Lockheed) and Boeing with his revolutionary YB-35. The Northrop YB-35 flying wing was faster and all around more capable than the B-36 that ultimately won. The YB-49 - with modern engines is basically the current B-2, and similar to the soon to be B-21 Raider. Truman era corruption tried to force Northrop to merge with Consolidated Vultee/Convair (now Lockheed) - to keep money and power in the "right hands". Jack Northrop refused, and he lost the contract to produce the bomber that would replace the B-29. In the process Truman's buddies yanked Northrop in all sorts of directions, including changing requirements for no reason other than to hobble the YB-35/YB-49 to make it less competitive against the disaster that was the B-36 - 6 piston engines, 4 jet engines, slower cruise speed than a B-29 and so unreliable that during pre-flight checks the flight engineer would often joke "2 turning, 2 burning, 2 smoking, 2 joking, and 2 unaccounted for, Sir!". Ultimately, when the YB-35/YB-49 was canceled, the government forced the transfer of Northrop's jet and turbine engine technology to GE. Fortunately, Northrop persisted and didn't sell out or give in to government corruption - and neither should Musk .
Had Truman era corruption not interfered with the free market advances and visionary designs of Jack Northrop (a self-taught engineer with no formal college degree), the US could have skipped over a trillion dollars of government fraud and corruption that went on for decades, and in many ways continues to this day - the same kind of fraud and corruption that is now being exacted upon Elon Musk and Tesla.
As others have suggested above - ironic justice would be for the SEC lawsuit to drive Tesla stock prices down enough for Elon to finally take Tesla private.
I gotta love partying rapist fratboys.
If you have to put liquor in your Anus to get drunk, you do not need to be on the supreme court.
Truth isn't Truth - Guliani
The problem is, what Elon allegedly did is in fact illegal. Unlike in your case, the cost to send SEC the evidence is nothing compared to the cost of a settlement. So if he had any evidence that could exonerate him, he would've already used them, then SEC wouldn't have bothered charging him in the first place.
Except when the SEC and Musk/Tesla disagree on if the evidence exonerates him. They probably did provide the evidence and just disagree on what that means to the case.
The fact that the offered settlement is so far from what the SECs demands, suggests to me that the SEC isn't so sure about their case.
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Anyone watching the interviews with half a brain can see it: Elon needs to step back and take a break before he falls apart. If you ask me he's a world treasure. A higher chance of him being productive later is the best thing for us, for himself, and for his companies. Whether he takes this deal or not he should focus a higher percentage of his efforts on delegation. He should create a team of ten of the best engineers in the world and, yes, two board members and he should delegate more than half of his work to them.
If video games influenced behavior the Pac Man generation would be eating pills and running away from their problems.
The YB-35 has a speed of 393 mph and a load of 50,000 lbs but had issues with vibration. The YB-49 had a speed of about 480 mph but a bomb load of only 16,000 lbs (too little for the H-bomb) and half the required range. The B-36 (mixed power plants) had speed of 435 mph and a bomb load of 72,000 lbs. Basically the Northrop designs were unconventional (high risk) and lacked the required performance. The mixed propulsion RB-49A might have had a chance, but a RB-36 was available without having to support an additional type. with pretty similar performance, and the U2 was in development. The RB-49A cancellation was without reason as the U2 was secret. Basically the YB-35 and 49 failed on their own lack of merits other than as a way to potentially research aircraft that might have had the required performance.
Other nations also looked at flying wing designs from the 30s to the 50s, and the only one that got close was the Avro Vulcan, and even then modified from the original flying wing design.
What I meant is the difference between the settlement and what the SEC seeks for in court.
To me the difference between two years vs being barred from being a director/officer for any publicly traded company is quite big. But I guess this is usual in the US. Probably works well to scare people out of trying your luck in court
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I know all about it.
Really? You know all about it?
I have no idea whatever manipulation he was attempting.
Oh, so you know all about it, but you have no idea? Thanks for clearing that up for us.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
the pope? Why not go back to how the Fascists defined corporativism.
"Under fascist corporatism, sectors of the economy were divided into corporate groups, whose activities and interactions were managed and coordinated by the government. The idea was to split the difference between socialism and laissez faire capitalism, letting the state control and direct the economy from the top-down without itself owning the means of production. Mussolini's official title was "commander and chief of the economy" among others!
The National Council of Corporations was the government body in charge of managing Italy’s economy, and At its inauguration, Mussolini stated, “The [NCC] is to the Italian economy what the Chief of Staff is to the Army: the thinking brain that prepares and coordinates.”
The idea was that this body would negotiate contracts and centrally plan production throughout the economy, regulating the sectors of art, industry, agriculture, trade, comm-unication, transportation, and finance — thus settling disputes, producing social harmony, and generating economic efficiency.
In reality, it did none of this, and the system was used for rent-seeking, and to reward friends and crush enemies of the government."
http://blog.skepticallibertari...
Some drink at the fountain of knowledge. Others just gargle.
From the SEC website, right in the middle of the home page:
We inform and protect consumers
Meaning, they care about consumers' rights, not the corporations, and they make sure that consumers are aware of their rights.
We facilitate capital formation
Meaning they are involved in the sales of securities - you have to tell them what is happening. That makes sure they can follow up on item number one.
We enforce federal securities laws
Like those that Musk broke. No clause about "unless we think it could hurt other people, in which case we ignore the law"
We regulate securities markets
Yep, you cannot sell or offer to buy securities without following the rules. You can't just go an announce made-up data like Musk did, especially when it would damage the market - as Musk's tweet did (fraudulently driving the stock price up).
We provide data
Yep, you have to report your data in GAAP standard format and calculations, which show Tesla losing billions of dollars. Not in the fantasy-land accounting that Tesla used to use (and many of its most vocal supporters here use) that show it is "making a profit".
Break the law, go to jail. Or in this case, lose tens of millions of dollars and be banned from controlling interest in companies - because that is what is best for the market. Stability, reliability, fairness. Not fraud.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Shorts only hurt your company's operation is you need to continually sell shares to generate the revenue to continue operations. If you were making profit (which, at 15 years of age and 10 years on the market, Tesla should be able to do) then there's no issue. If the stock price goes up or down, it doesn't impact your operations. Consider Ford, who's seen their stock price nearly halve in the last 4 years. Yet they are profitable, continue to pay a dividend, and have no financial issues with operations.
Shorts only hurt companies that are heavily over-valued and lose money (so they need to sell more stock continually, or sell bonds to raise capital). If you cannot sell stock at a high price, you need to sell more, and run the risk of losing control of the company. Or if your stock price is falling, then the bond market may not feel secure enough in your long-term future and up the rates. But if you were able to make a profit - or at least show that if you cut capital expenditures you'd make a profit, like Amazon did - then it's a non-issue. However, with Tesla, because they lose money even before you account for capex, they are a magnet for shorts. Overvalued, no path to profitability, only a few months of cash left - real attractive for shorting!
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Wait, you mean Musk didn't attack the shorts for personal gain? Really? The guy who rails against shorts (who wouldn't be an issue if he could actually make a profit) didn't attack them for personal gain, or personal satisfaction?
And you must have missed the 35 who went to jail for the 2008 meltdown, and the dozens of CEOs forced out from their positions...
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Yes, to encourage settlements they settle for less than they'd ask for in court. If they didn't, it would bw foolish for anyone to settle.
Also with these kinds of things it's useful to watch out for phrasing like "facing up to five years". In that phrase, five years is rhe maximum penalty allowed under the law. That doesn't mean the prosecution would ask for the max. That's just the max they could ask for.
In this instance, Musk clearly and publicly said finding was secured at $420, and that seems to be a lie. So guilt is pretty clear. On the other hand, he didn't sell a bunch of stock the day after the announcement or something like that, so that's definitely a mitigating factor. He was trying to get press, to get attention for his company, not pump and dump. So a medium sentence might be appropriate.
You are confusing the MAXIMUM speed of the B-36 with it's CRUISE speed. At 480 miles per hour, the B-36 wouldn't have been able to match the B-29's combat radius. The B-36 CRUISE speed was 230 miles per hour, which is where it's range figures came from.
As for the YB-49 having flight problems of any kind - including vibration - that has also highly questionable. Some pilots reported pleasant and benign flying qualities, others reported it was an unsafe death trap that was about to fall out of the sky at any minute. Turbulence would make it yaw, which would eventually dampen out. Not unstable, but different due it's no-tail design. Northrop added little vertical stabilizers that helped, and the computer flight controls at that time would have been more than able to compensate, had development gone that far. Again, corruption and politics made it all the way into the cockpit. The fact that the B-21 Raider is finally replacing the B-52 should call into question ALL previous evaluations of the YB-35/49. Northrop didn't even want to compete for the B-2 contract, due to all the past corruption. The Pentagon had to beg them.
And, as for the YB-49 not having the range or payload - that was pentagon corruption in mucking with requirements in order to derail the program. Research it. A YB-35 with modern turboprop engines (which Northrop was developing and was later forced to hand over to GE) would have made the B-36 look embarrassingly antiquated, but the pentagon cleverly prevented Northrop from competing fairly. Cushy defense contractor jobs and bonuses were at stake.
Corruption. It was, and is, rampant. Corporatism, crony capitalism, deep state, call it whatever you want, but this is what is really behind the SEC lawsuit against Elon Musk.
Elon, don't let the bastards grind you down.
Or they didn't do anything illegal? Just because you fail spectacularly does NOT mean you acted illegally.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!