Musk Under Fire Again, This Time From His Supporters

Tesla CEO slammed for attack on SEC; his latest storm could cause problems with settlement.

by on Oct.08, 2018

Tesla CEO Elon Musk cannot help himself, taking a shot at the SEC via Twitter.

Tesla CEO Elon Musk is taking heat again, this time from supporters, as well as his long list of critics, for his attack on the Securities and Exchange Commission.

After reaching a deal with the SEC early this month that forced him to step down as Tesla chairman, the 47-year-old executive fired off the latest in an ongoing series of tweets dubbing the federal agency the “Shortseller Enrichment Commission.” That was a reference to the investors who have been betting on Tesla stock to fall and who have become one of Musk’s biggest concerns.

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Musk came under the SEC microscope after tweeting in August about a supposed plan to take the battery-carmaker private. Federal regulators subsequently accused the Tesla founder of making “false and misleading” claims, finding no basis to support the proposal and, in particular, Musk’s initial tweet stating “Funding secured.” The SEC could have completely barred the exec from serving in any capacity on a public company and it could have levied substantially more fines than the $14 million penalty Musk had to pay.

If anything many industry observers felt the CEO got off with little more than a wrist slap, and his latest public comments could cause problems getting the SEC settlement approved by a federal judge who is asking for more information on the deal.

(Musk settles: Pays SEC $20 million, resigns as chairman. Click Here for the story.)

Musk slammed the SEC in this tweet, calling the agency the Shortseller Enrichment Commission, earning criticism from friend and foe.

But Musk has shown little propensity for moving on after a setback and last week tweeted, “Just want to (sic) that the Shortseller Enrichment Commission is doing incredible work,” Musk, a frequent critic of investors betting against the electric car company said in the tweet. “And the name change is so on point!”

The South African-born executive followed with a tweet attacking the short-sellers and accusing them of “mak(ing) excessive profits” at the expense of their clients.

The SEC has held its regulatory tongue, declining to comment on Musk’s put-down. Not surprisingly, however, some of the shorts quickly fired back. Greenlight Capital, which was named by Musk in his tweet, pointed to Musk’s own deception.

Meanwhile, Teresa Goody, a former SEC attorney and CEO of The Goody Group, told the Reuters news service that Musk’s “contempt for the SEC is sending a message that he has no regard for the securities laws that are intended to protect investors and ensure a fair and efficient marketplace.”

The fact that Musk went on the attack after agreeing to settle the SEC’s complaints comes as something of a surprise to observers who though he might try to tone down the behavior that has created so many headaches for both himself and Tesla in recent months.

(Click Here for more about Tesla taking heat as Musk lashes out.)

That includes not only the abortive privatization plan but Musk’s curious attack on a British diver involved in the rescue of a youth soccer team trapped in a flooded Thai cave earlier this year. The diver has now sued Musk both in the U.S. and Britain for alleged slander.

Biz reporter Liz Claman pushed Musk for answers about taking the company private.

Eric Schiffer, head of Los Angeles-based Reputation Management Consultants, told bingdb.info last week that he hoped the SEC settlement would be “a wake-up call that may have saved his future and Tesla. Musk,” Schiffer added, “needed this rock bottom event to analyze his own behavior and make a corrective action and maybe make a jump in terms of emotional maturity.”

But the latest round of tweets has observers wondering if anything has changed and if Musk will wind up creating more potentially damaging problems for himself and Tesla, even as the carmaker appoints a new chairman and its board tries to rein in the company founder.

They aren’t the only ones concerned. Among Musk’s roughly 20 million followers, more than a few criticized the executive for again engaging in a flame war.

“I have lost 30 years of my life savings all in $tsla thanks to your tweets please stop,” TrendTrader007 said in a response to Musk’s attack on the SEC. “If you continue this self destructive path you will lose all your ardent supporters and the goodwill from diehard $tsla longs like me.”

(To see more about Tesla meeting its Q3 production goal, Click Here.)

Ironically, by attacking the SEC, Musk could find himself facing problems getting his settlement approved. U.S. District Judge Alison Nathan last Thursday demanded a joint statement from both the feds and the Tesla CEO justifying the agreement. The court, she said, needs to make a “minimal determination of whether the agreement is appropriate.” Judge Nathan could reject the deal and send both sides back to renegotiate or, at the extreme, take the case to court. She is expecting Tesla and the SEC to provide their joint statement before the end of this week.

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