Published , by Ozzie Mejia
Published , by Ozzie Mejia
Tesla CEO Elon Musk appears to have run afoul of the U.S. Securities and Exchange Commission again. On Monday, Tesla revealed that the SEC filed suit against the company back in November 2021. The action stems from a potential violation of Musk's previous settlement with the SEC.
Remember back in November when Musk took a Twitter poll asking if he should sell 10 percent of his Tesla (TSLA) shares? Then the results came in and he pledged to abide by the poll? As it turns out, according to CNBC, the SEC did not take kindly to this, because this potentially affected the price of the company's stock. However, the issue goes beyond that. The SEC is also looking into whether this violated Tesla's 2019 settlement, in which the company agreed to monitor Musk's Twitter account to prevent him from doing this exact kind of thing.
Let's go back to the 2018 SEC lawsuit againsit Tesla, in which Musk's Twitter was at the center of fraud allegations. Musk had previously pledged to take Tesla private once its stock hit $420 per share, which sent the stock price into a tailspin. The suit was eventually settled with Tesla agreeing to have one person monitor Musk's Twitter to pre-approve any tweets, at the risk of further market volatility.
Musk's Twitter poll can be interpreted as the CEO thumbing his nose at the SEC once more and that looks to be fueling this latest lawsuit. Given that the last suit resulted in Musk paying a substantial $20 million USD fine and in him relinquishing his role as chairman of the Tesla board for three years, the consequences for another violation could be heavy. We'll continue to monitor this story and come back with any further updates.