Elon Musk twice violated a court order meant to prevent the Tesla CEO from allegedly using Twitter to manipulate the stock market, according to documents obtained by the Wall Street Journal on Tuesday.
The Securities and Exchange Commission alleged in a lawsuit that Musk committed fraud by tweeting about a potential buyout of his company in August 2018. Musk claimed that he was considering taking the company private and that he had secured funding to do so. It was reported at the time that the Saudi Arabian sovereign wealth fund was the source of that funding. Musk is the second-richest person on the planet, worth $156 billion according to Fortune.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
As Musk wrote shortly thereafter in a public blog post:
I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement.
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Musk and Tesla paid $20 million apiece to settle the SEC suit. In addition to Musk stepping down as CEO, the agreement stipulated that the Tesla leader’s tweets would be reviewed by corporate lawyers before being posted.
The SEC warned Tesla in May 2020 that the company had failed “to enforce these procedures and controls despite repeated violations by Mr. Musk.” The letter added, “Tesla has abdicated the duties required of it by the court’s order.”
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