SEC wants Musk out at Tesla
by Rachel Lynn Aldrich
Posted 9/28/18, 11:34 am
Tesla stocks slid on Friday after government securities regulators asked on Thursday for the removal of Elon Musk as CEO of the electric car company. The Securities and Exchange Commission asked the U.S. District Court in Manhattan to bar Musk from serving as an officer or director of a public company. The complaint says that Musk’s claim on Twitter in August that funding was secured for Tesla Inc. to go private at $420 a share was false and amounted to securities fraud. Musk and the company’s board later said they decided not to go private after all.
Following the SEC request, Tesla stocks fell 12 percent, which is perhaps no surprise considering Musk’s celebrity status. The Wall Street Journal reported that Musk decided not to settle with the agency and will fight the case.
“I have always taken action in the best interests of truth, transparency, and investors,” Musk said in a statement. “Integrity is the most important value in my life and the facts will show I never compromised this in any way.” Musk and Tesla didn’t fully disclose the details of the plan in the tweet or later that day as required, said Peter Henning, a law professor at Wayne State University, who added, “You can’t make full disclosure in 280 characters.”
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