Elon Musk Bears The Brunt Of Misleading Tweets, Accused Of Fraud

Elon Musk Bears The Brunt Of Misleading Tweets, Accused Of Fraud

Elon Musk Bears The Brunt Of Misleading Tweets, Accused Of Fraud

Tesla shares slid 5 percent Friday morning a day after Musk mocked the SEC in late afternoon tweet, calling the agency the "Shortseller Enrichment Commission".

"Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work", wrote Musk, who has frequently blasted investors who bet against the company's share price rising.

Musk and Tesla agreed to pay $20 million each, and Musk agreed to step aside as Tesla's chairman for three years, to settle charges that Musk misled investors in a series of tweets on August 7.

Musk's tweet came the same day that Judge Alison Nathan, a US District Court judge in NY, requested a joint letter explaining why she should approve the tentative settlement deal between Musk and the Securities and Exchange Commission.

On Monday, Elon Musk tweeted a Youtube link to the 1990s hip-hop video entitled O.P.P. captioned with "Naughty by Nature", the group behind the popular rap song. "And the name change is so on point!" he said on Twitter.

Tesla did not immediately respond to requests for comment.

The Tesla boss agreed to pay a fine of $20m (£15m) to the Securities and Exchange Commission regarding a tweet he had written boasting that he had funding to take his firm private.

The judge gave Tesla and the SEC one week to submit a joint letter explaining the settlement in further detail. But that doesn't mean Tesla's board can't order Musk to tone done his Twitter posting in the best interests of the company. "The vast majority of settlements like this are approved by courts". "Granted it has only been three days, but it may have been sensible to ask him not to tweet anything related to the company until they had an opportunity to put in the policies, procedures and controls required by the settlement". In another tweet, Musk also criticized short-sellers, saying, "Short-sellers are value destroyers".

"He'll blame the board for taking him out, or the SEC for derailing his genius", Sonnenfeld said.

It was mere days ago that Musk and SEC agreed on a settlement to avoid a potentially lengthy battle over claims of securities fraud.

The settlement provided for appointment of a new chairman and directors, as well as moves to oversee Musk's output on social media.

"I don't think the SEC would look at this as a denial of the facts alleged", said Peter Henning, a law professor at Wayne State University in Detroit.

When hearing Musk will no longer be chair of Tesla - he is allowed to continue as CEO, though - one would have thought Tesla's stock would take a hit, crash and burn, plummet to oblivion.

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