SEC’s investigation into Tesla is a very well-known court case. Musk offers to provide his insights into the matter in his recent talk at TED2022. It was being mentioned because the TED founder Chris Anderson asked Musk whether he had “funding secured” for the Twitter deal. To which Musk bought up the four-year battle with SEC.
Musk has been trading blows with the SEC over the agency’s order that his tweets be reviewed by a lawyer before being publicly posted. The order is based on Musk’s decision to send the now-notorious “funding secured” tweet on August 7th, 2018, in which he claimed to have the finances to take Tesla private at $420 a share. (Tesla has been a publicly-traded company since 2010.)
The SEC immediately launched an investigation, eventually concluding that, while he had held a few meetings with Saudi Arabia’s sovereign wealth fund, Musk “had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a ‘special purpose fund,’ and had not confirmed support of Tesla’s investors for a potential going-private transaction.”
Funding secured
Musk said, “I should say actually… with Tesla back in the day, funding was actually secured. I want to be clear about that.” He further added, “I should say like, why do I not have respect for the SEC in that situation? And I don’t mean to blame everyone at SEC but certainly the San Francisco office. It’s because the SEC knew that funding was secured, but they pursued an active public investigation nonetheless.”
Musk explained that at the time, Tesla was under assault from short-sellers who were betting that the company would go bankrupt. Tesla’s stock was extremely volatile, and the company was attempting to scale production of the Model 3 electric sedan, which was proving to be far more difficult than Musk and the company’s top executives anticipated. Echoing statements made by his lawyers in recent court filings, Musk said that he felt coerced into settling with the SEC in order to ensure Tesla’s banks would continue to provide capital to the company so it wouldn’t go bankrupt.
With which Musk added, “So that’s like having a gun to your child’s head. So I was forced to concede to the SEC unlawfully. Those bastards.” The SEC is currently investigating whether recent stock sales by Musk and his brother Kimbal Musk potentially violated insider trading rules. The investigation began late last year after Musk and his brother sold $108 million worth of Tesla shares.
Credits- The Verge
