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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Elon Musk's Not Only In The Courtroom For SEC's Tesla Tweet Contempt Showdown

Elon Musk's Not Only In The Courtroom For SEC's Tesla Tweet Contempt Showdown



Elon Musk (Photo by Diego Donamaria / Getty Images for SXSW)

Elon Musk has many admirable, even damn near superhuman, qualities. Modesty is not among them. And it's alright for someone who's accomplished so much to be a little into himself. I suffered from a milder form of the same affliction myself.

It's probably a shock to learn that attorneys (gasp!) Often have the size of the Falcon Heavy. Now that Elon Musk himself was up to contest the U.S. SEC Complained That Grown Man Elon Musk Failed To Get Approval For A

Some quick background for those of you new to this (dumb) controversy: nearly a billion news cycles ago, in August, Elon Musk tweeted that he was "considering" taking electric carmaker Tesla private at a generous $ 420 per share. The SEC promptly (for them) filed a complaint accusing Musk of violating 1

7 C.F.R. § 240.10b-5. This original accusation was at best and Musk settled with the SEC in a matter of days.

The thrust of the settlement agreement was a big find. But, like your drunk friend who was unflatteringly lighted in a bar selfie, it also required preapproval for future social media posts. Tesla was at a board committee to oversee Musk's social media posts, and Elon was his tweets at this board committee before posting, at least if they contained information that would be "material" to Tesla shareholders like me. out Mr. Musk wasn't really interested in his Twitter feed by board committee, and on February 19 tweeted that Tesla would build 500,000 cars in 2019. He quickly corrected that with another twitter clarifying that the automaker would actually only make more than 400,000 cars during the calendar year of 2019, but would be constructing vehicles at an annual rate of 500,000 by year's end. All of this was already public information. Fuming, not so much about the content of the tweets as the fact that Musk didn't know them by committee, the SEC filed a motion asking the US District Court for the Southern District of New York to hold Elon Musk in contempt for the violating the settlement agreement.

The Mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. ”I copied that right from their website. But nobody at the SEC apparently cares that it has their own efforts to punish Musk that keeps refueling Tesla's stock, hurting Tesla investors large and small. A few people at the SEC seem to have lost sight of what their interests are actually supposed to be watching out for. Instead, they have made a point of going after someone who has frequently taunted the agency and emphatically stated on national TV, "I want to be clear: I do not respect the SEC."

Look, part of every government worker's job in this country, for better or worse, is to calmly list to criticisms from citizens, even the prominent ones. And part of every lawyer's job is to promote the best interests of his or her client, which sometimes means swallowing one's own pride. This is not easy for the individual actors in these roles, but it is important. Someone at the SEC needs to consider how the agency could possibly protect investors with this crusade to police Elon Musk's Twitter feed against the dangers of disclosing publicly available information and being a little imprecise with phrasing on a limited-character social media platform that the President of the United States spends most mornings plastering with outright lies.

The SEC will indeed have the chance to reconsider, thanks to the wisdom of Judge Alison Nathan. She gave Musk and the SEC two weeks following the contempt hearing to renegotiate and clarify the 2018 settlement agreement. "Put your reasonableness pants on," Judge Nathan said to both sides in open court. And, although there are no signs of progress, I hope they do. [SECURITY] SEC personnel should think more about who they are supposed to be protecting and less about the mean things Elon Musk said about them. As for Elon himself somehow stumbles across this article: an apology goes a long way to salve bruised egos. Apologizing could help out the small investors who are really trying to support you, and might also have some of them as a means to just let you get on with saving the world. Some of the best advice I recently gave 12-year-old applies here: you don't have to say, you just have to say it.


Jonathan Wolf is a litigation associate at a midsize, full service Minnesota firm. He also teaches as an assistant professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn't want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.


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