SEC subpoenas Tesla on Elon Musk’s settlement tweet
US Securities and Exchange Commission seeks information on compliance regarding a lawsuit over his tweet in 2018 on taking the company private
Tesla said on Monday it received a subpoena from the US securities regulator related to a settlement that required CEO Elon Musk’s tweets on material information about the company to be vetted.
The subpoena by the US Securities and Exchange Commission (SEC) was issued on November 16, about 10 days after Musk asked his Twitter followers if he should sell 10% of his stake in the company, triggering a stock sell-off.
As of last close, the electric-car maker's shares had fallen by nearly a quarter since the tweet. The shares were down 1.4% at $909.98 on Monday morning.
The SEC’s latest action, which was disclosed in a securities filing by the carmaker, adds to pressure on Tesla from federal auto safety regulators regarding vehicle recalls and investigations related to its driver-assistance software. The SEC declined to comment.
In 2018, Musk settled a lawsuit by the SEC over his tweet on taking the company private, agreeing to have the company’s lawyers preapprove tweets with material information about the company.
Tesla in December was hit by a lawsuit over Musk’s social media posts including his Twitter poll on stock sales that pulled down the company’s share price. This was not the first lawsuit accusing Musk of violating the settlement terms.
Reuters reported last year that the SEC has opened an investigation into a whistle-blower complaint that Tesla failed to properly notify its shareholders and the public of fire risks associated with solar panel system defects over several years.
Tesla said on Monday it “routinely” co-operates with government subpoenas and other investigations and inquiries.
In the filing, the company also said the California department of fair employment and housing investigated allegations of race discrimination and harassment in Tesla workplaces and gave notice that it has grounds to file a civil complaint against the electric-car maker.
Tesla has already been battling a series of lawsuits on racial abuse and sexual harassment, and a federal jury in October ordered the company to pay $137m to a Black former contract worker in one of the cases.
New York State Common Retirement Fund said on Monday that it has filed shareholder proposals with Tesla, Activision Blizzard and Starbucks, requesting they report on their efforts to prevent harassment and discrimination against employees.
The proposals ask the companies to disclose, among other things, the total number and aggregate dollar amount of disputes settled related to sexual abuse or harassment or discrimination.
Tesla and the White House have been at odds over the past few months, with the Biden administration focusing on legacy carmakers, including Ford Motor and General Motors (GM) in the electric vehicle race.
In January, the CEOs of GM and Ford attended a meeting of tech and motor companies hosted by US President Joe Biden. Musk was not on the list of attendees.
Musk has been using his Twitter account to attack the Biden administration for allegedly ignoring Tesla and holding up Detroit carmakers as leaders in the shift to electric vehicles. Musk called Biden a “damp sock puppet” in a tweet last month.
Musk is also feuding with the United Auto Workers (UAW) union, a key ally of Biden’s. The National Labor Relations Board in March ordered Musk to delete a tweet that said Tesla workers could lose stock options if they voted to join the UAW. Tesla is appealing that order.
Tesla said on Monday the fair market value of the electric- carmaker’s bitcoin holdings as of December 31 was $1.99bn.
The company, which had invested $1.5bn in bitcoin in 2021 before selling 10% of the holding, said it registered about $101m in impairment losses last year due to the value of bitcoin.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.