SEC Lawsuit

[dqd88]

Elon's believed a lot of things, and been wrong on a decent number of them (automating "everything" for the Model 3 production line being one of them). He's an incredibly thin-skinned person, and regardless of what he wants/desires there are rules/regulations/laws that govern how C-level execs at publicly traded companies can act. He broke the law, plain and simple, and any judge overseeing this is going to quickly agree with that interpretation.

If he was offered a settlement, that didn't involve him leaving the company, then he was a Grade-A moron for not taking it. This fight is yet one more thing he doesn't have time for.

LOL you sound like a short in sheep's clothing.

He's been wrong? duh, he's not god. no ceo in the world is always right. you haven't heard jeff bezos talk much obviously.
Elon freely admits when he's wrong. THAT'S INTEGRITY

Think skinned, maybe yes. He's passionate about his company and he's right about the shorts but I agree he needs to not let them get under his skin. Easy for us to sit here in our underwear and say that while Elon's works himself to the bone. You (and us all) probably are 10% of productive as he is in a week. Cut him some slack

I agree that he needs to behave more like a normal CEO if he's leading a public co. But that's why T should be private

He did not break the law. That's not proven. But nice try fear mongering. Did you read the complaint? Sounds like you're on team Chanos

 

[Krugerrand]

I saw that..... you take the no guilt settlement and pay a fine! Why pass on that? We are here talking about a settlement being the best result. It's not like he didn't do what he did. FIghting the SEC is never a good idea.

(Read you as specific and general you)

You have less than zero idea what the settlement contained so don’t pretend you know what was best for Elon to do regarding it.

Biggest bunch of armchair quarterbacks in the history of Tesla all congregated right here on TMC. All thinking you know better. As if you have experience as a CEO of a company this polarizing trying to do the impossible and then incredibly thinking you can do better.

It wasn’t a good idea to fight the powerful and politically backed NADA either and every state dealership lobby. It wasn’t a good idea to fight the monopoly ULA held. It wasn’t even a good idea to start a car company or a rocket company.

Just where is your cognitive ability to add 1 & 1? Let me spell it out; he’s fighting the SEC lawsuit like he fights everything else that he doesn’t think is right, fair, or is in his way to a better planet. Your righteous indignation is wasted, along with everyone elses.

If you don’t like the car, sell it.
If you don’t like the delivery or after ownership service, buy from a dealership.
If you don’t like the decisions Elon makes, sell the stock and go short or go invest in one of those Tesla killer competitors.

This constant need to nitpick everything the man does and spin it into a negative is some seriously wanting, ugly inside human behavior. Ask a loved one to hug you, you need it.

 

[bkp_duke]

LOL you sound like a short in sheep's clothing.

He's been wrong? duh, he's not god. no ceo in the world is always right. you haven't heard jeff bezos talk much obviously.
Elon freely admits when he's wrong. THAT'S INTEGRITY

Think skinned, maybe yes. He's passionate about his company and he's right about the shorts but I agree he needs to not let them get under his skin. Easy for us to sit here in our underwear and say that while Elon's works himself to the bone. You (and us all) probably are 10% of productive as he is in a week. Cut him some slack

I agree that he needs to behave more like a normal CEO if he's leading a public co. But that's why T should be private

He did not break the law. That's not proven. But nice try fear mongering. Did you read the complaint? Sounds like you're on team Chanos

I own TSLA, I don't short it. I also own two Model S's and three Powerwalls. I'm the furthest thing here from a short seller.

The point is this: BY LISTING TSLA as a public company, Musk, the other execs, and the Board of Directors all agree to be governed under US Securities and Exchange Law. ANYTHING an executive does that potentially influences stock price has to be done within the bounds of those regulations. Period - this is not open for discussion.

You can be as passionate as you want, but Must is not above the law, and the law specifies what he can and cannot do. Tweeting "false information" is against the law. The SEC lawsuit says they already have depositions from enough people and companies to support their claim that funding really was NOT secured. It was "discussed", but in financial land, "secured" means signed documents, nothing short of that qualifies as "secured". Again, he broke the law, and it will be proven in a court of law now.

 

[Dan Detweiler]

I own TSLA, I don't short it. I also own two Model S's and three Powerwalls. I'm the furthest thing here from a short seller.

The point is this: BY LISTING TSLA as a public company, Musk, the other execs, and the Board of Directors all agree to be governed under US Securities and Exchange Law. ANYTHING an executive does that potentially influences stock price has to be done within the bounds of those regulations. Period - this is not open for discussion.

You can be as passionate as you want, but Must is not above the law, and the law specifies what he can and cannot do. Tweeting "false information" is against the law. The SEC lawsuit says they already have depositions from enough people and companies to support their claim that funding really was NOT secured. It was "discussed", but in financial land, "secured" means signed documents, nothing short of that qualifies as "secured". Again, he broke the law, and it will be proven in a court of law now.

Wow, impressive. You have managed to elevate yourself to both judge AND jury. Congratulations!

Dan

 

[dqd88]

I own TSLA, I don't short it. I also own two Model S's and three Powerwalls. I'm the furthest thing here from a short seller.

The point is this: BY LISTING TSLA as a public company, Musk, the other execs, and the Board of Directors all agree to be governed under US Securities and Exchange Law. ANYTHING an executive does that potentially influences stock price has to be done within the bounds of those regulations. Period - this is not open for discussion.

You can be as passionate as you want, but Must is not above the law, and the law specifies what he can and cannot do. Tweeting "false information" is against the law. The SEC lawsuit says they already have depositions from enough people and companies to support their claim that funding really was NOT secured. It was "discussed", but in financial land, "secured" means signed documents, nothing short of that qualifies as "secured". Again, he broke the law, and it will be proven in a court of law now.

Again, I think you're misinformed. Prove that he broke a law. Tesla stated in prior filings that twitter would be used to communicate with investors. Elon told the truth at every point. Where exactly did he break the law? You have to be specific. You have no proof of anything, clearly you've been brainwashed by the shorts.

It was discussed? How do you know? Were you in the room with Yasir (Saudi) and Elon? If the CEO of the Saudi PIF says verbally it's a go, then it is secured. A verbal agreement, a handshake deal is as valid as one in writing (though harder to prove). You haven't shown where he broke the law. Even the complaint didn't show that. It's a super lame complaint

 

[bkp_duke]

Wow, impressive. You have managed to elevate yourself to both judge AND jury. Congratulations!

Dan

I'm a shareholder, as any shareholder I have the RIGHT to call out the executive(s) if I have good reason to feel that they are not acting in the best interests of the company and shareholders.

No one can tell me that Musk has completely acted in the best interests of the company:
1) pedo guy - really? does he have zero common sense?
2) tweeting "funding secured" when it was not

I'm just a pragmatist, and not so blinded by "love" for all things Musk to know when there really is a problem.

 

[bkp_duke]

Again, I think you're misinformed. Prove that he broke a law. Tesla stated in prior filings that twitter would be used to communicate with investors. Elon told the truth at every point. Where exactly did he break the law? You have to be specific. You have no proof of anything, clearly you've been brainwashed by the shorts.

It was discussed? How do you know? Were you in the room with Yasir (Saudi) and Elon? If the CEO of the Saudi PIF says verbally it's a go, then it is secured. A verbal agreement, a handshake deal is as valid as one in writing (though harder to prove). You haven't shown where he broke the law. Even the complaint didn't show that. It's a super lame complaint

You keep mentioning the shorts, but I don't care about the shorts, or follow them, etc.

You CLEARLY have no concept of Securities Law, because a "handshake" according to securities law is NOT sufficient to qualify for "funding secured". If SIGNED DOCUMENTS do not exist (i.e. an agreement for funding, or an agreement to pursue funding), it is illegal. This is black and white, not something that you can fake, or skimp on.

Go back and look at SEC lawsuits of the past. These guys do NOT sue many companies. You really have to screw up big time to get in the cross-hairs of the SEC. When they sue you, they almost always already have all the evidence they need to bury you. Musk was a moron for not taking the settlement.

The complaint CLEARLY did show where Musk broke the law, you simply don't want to acknowledge it. And it's not just the SEC that is investigating this. CA State is as well, and you cannot say that CA is under the thumb of the "Trump administration".

 

[mos6507]

Jobs forced out, Apple struggled.
Jobs returned Apple soared.

The Jobs who got forced out deserved to get forced out. Wandering in the desert made him stronger. Musk hasn't been humbled like that and it's why he's made a lot of these kinds of mistakes in the first place.

 

[Dan Detweiler]

I'm a shareholder, as any shareholder I have the RIGHT to call out the executive(s) if I have good reason to feel that they are not acting in the best interests of the company and shareholders.

No one can tell me that Musk has completely acted in the best interests of the company:
1) pedo guy - really? does he have zero common sense?
2) tweeting "funding secured" when it was not

I'm just a pragmatist, and not so blinded by "love" for all things Musk to know when there really is a problem.

You didn't "call out", you convicted. Very different things.

Dan

 

[Skotty]

The lawsuit and this thread have convinced me that Tesla should be taken private. Investors are all just greedy short sighted tools who care about nothing other than money. Who cares about the future of humanity when you stock shares took a brief hit because of poorly thought out tweet. Right? That's what I'm hearing.

Shame on Elon for making that stupid loose lips Tweet, and shame on everyone else for caring.

 

[bkp_duke]

You didn't "call out", you convicted. Very different things.

Dan

Time will tell which of us is right then. Historically, the SEC does not bring these kind of lawsuits unless they have rock hard evidence to support their claims.

 

[Dan Detweiler]

Time will tell which of us is right then. Historically, the SEC does not bring these kind of lawsuits unless they have rock hard evidence to support their claims.

Then why offer a settlement? That's the part that bugs me. It comes off as some sort of high level extortion. "If you can put enough coin in our bank account we're willing to look the other way". Just doesn't seem to be on the up and up.

Dan

 

[bkp_duke]

Then why offer a settlement? That's the part that bugs me. It comes off as some sort of high level extortion. "If you can put enough coin in our bank account we're willing to look the other way". Just doesn't seem to be on the up and up.

Dan

You should look at historical actions by the SEC. They offer settlements as a way to "remedy" a situation without inflicting undue influences to the company's stock. In this case they were likely trying to slap Musk on the wrist to teach him a lesion without tanking the share price of TSLA. When Musk refused the settlement, he forced their hand and the only option left to them would have been a full blown lawsuit.

Most SEC settlements are not for huge sums of money (for corporations that is - to us mortals they still look large). It's not a money maker for the SEC or the government, but meant to be a deterrent to exactly the things that Musk did. Lawsuit judgments on the other hand, that is a different ball of wax. Those can be punitive to the point of breaking a company, as they are NOT determined by the SEC, but by the judge.

I had a high school teacher that always said "Boys, don't piss into the wind. You will only get wet.". Musk seems to not have yet learned this lesson.

 

[AmpedRealtor]

This is the best thing that could have happened to Tesla. Musk has been, for some time now, the single biggest obstacle to Tesla's success and profitability. His utter incompetence as a manager has led every one of Tesla's products to suffer delay after needless delay. The most recent example of his inabilities was his admission that Tesla spent "hundreds of millions" on a failed, hyper automated manufacturing line. A project that had no relationship to reality. Now the line workers have to build cars in a tent without air conditioning. Maybe, if they actually had people on board with auto manufacturing expertise and a CEO who listened, those hundreds of millions of dollars (at least) could have been saved and Tesla might have been profitable by now. Instead, Musk has turned Tesla into a ponzi scheme.

All of the misrepresentations regarding Autopilot and FSD - all Musk. Did everyone conveniently forget all of the promises made to AP1 buyers that never came true? Remember that collapsed relationship with Mobileye that forced Tesla to abandon its AP1 customers? All Musk. Mobileye is on record with the SEC that they terminated Tesla's contract over use of the technology in situations that were not safe. Very telling, I'd say. The falcon wing doors, remember those? Another Musk brainfart that caused needless delays and made the car stupidly complex to build. Now the Chief Exaggerating Officer of Tesla smokes pot on a YouTube channel like an idiot teenager, risking all of SpaceX's government contracts.

Musk is not fit to be CEO and I've been saying this for a while. He makes poor decisions and then hides behind excuses to absolve himself of responsibility. Musk has zero interest in generating a positive outcome for his investors, that is painfully obvious. His desire to take Tesla private is like taking one's marbles and going home. Musk can't take the heat of public scrutiny and behaving in a responsible manner. Fine, get out.

In my opinion, every Tesla investor should be rooting for the SEC right now and hoping that their wish of removing Musk as CEO actually happens. Elon Musk clearly does not want to be doing what he's doing given his incredibly high level of self-sabotage. Perhaps any settlement should also contain a requirement for Musk to seek psychological counseling.

 

[PhaseWhite]

You should look at historical actions by the SEC. They offer settlements as a way to "remedy" a situation without inflicting undue influences to the company's stock. In this case they were likely trying to slap Musk on the wrist to teach him a lesion without tanking the share price of TSLA. When Musk refused the settlement, he forced their hand and the only option left to them would have been a full blown lawsuit.

Most SEC settlements are not for huge sums of money (for corporations that is - to us mortals they still look large). It's not a money maker for the SEC or the government, but meant to be a deterrent to exactly the things that Musk did. Lawsuit judgments on the other hand, that is a different ball of wax. Those can be punitive to the point of breaking a company, as they are NOT determined by the SEC, but by the judge.

I had a high school teacher that always said "Boys, don't piss into the wind. You will only get wet.". Musk seems to not have yet learned this lesson.

This settlement offer seemed completely reasonable, the main components were that Elon must step down from the Chairman role on the board of directors and that 2 new independent directors be appointed. Many institution investors have been pushing for a change like this for a while to give Tesla better corporate governance. As part of the settlement Elon could have stayed on as CEO.

If Elon and the SEC had agreed to settle the stock would have gone up instead of down. Taking this deal would have been the best course of action for someone who cares about Tesla Employees, Customers and Investors above all else.

Remember that short conspiracy theory as to why Tesla wasn't raising capital (because they were under SEC investigation) ? Guess what: now that is TRUE and Tesla will NOT be able to raise capital until they resolve this case with the SEC either through settlement, or a long and very public court battle.

In my own opinion, I think the problem is Musk's ego. His inability to see his mistake and take even the tiniest bit of ownership of it are now causing serious damage to the Tesla mission. This makes me said, since I want Tesla and Elon to succeed.

 

[azaz]

Musk’s ex lawyer was ex commissioner of the SEC yet Musk disagrees with his approach and replaced him. Classic giant ego Elon.

Musk really has his head in the sand here.

Charles Gasparino on Twitter

 

[N5329K]

I support Mr. Musk so long as his vision, actions and temperament support the transition to more sustainable (electric) transportation. For a bunch of years, he has been a very positive agent for change in that direction. No, not just positive: irreplaceable. But, he has always, as in from the very first day, generated what those who work with him refer to as the Elon Distortion Field. In the ego-driven battle between what he believes is so (or should be so) and what is so, errors enter the process. Sometime small ones (the Roadster's sill height change over a miniskirt delaying production), sometimes big ones (Alien Dreadnoughts, over-automation), sometimes inexplicably dumb ones ("pedo" guy) and sometimes very expensive ones (like now).
You don't want your CEO enriching those who bet against your stock.
You don't want your CEO giving his own best customers doubts about the wisdom of their orders.
You don't want your CEO keeping his board up at night wondering, What's he doing now?
Startups are where you usually find churn, uncertainty, financial veering, lots of ego-driven mandates, founder's syndromes and the like. But the great majority of startups also fail.
I don't want Tesla to fail.

 

[voip-ninja]

I own TSLA, I don't short it. I also own two Model S's and three Powerwalls. I'm the furthest thing here from a short seller.

The point is this: BY LISTING TSLA as a public company, Musk, the other execs, and the Board of Directors all agree to be governed under US Securities and Exchange Law. ANYTHING an executive does that potentially influences stock price has to be done within the bounds of those regulations. Period - this is not open for discussion.

You can be as passionate as you want, but Must is not above the law, and the law specifies what he can and cannot do. Tweeting "false information" is against the law. The SEC lawsuit says they already have depositions from enough people and companies to support their claim that funding really was NOT secured. It was "discussed", but in financial land, "secured" means signed documents, nothing short of that qualifies as "secured". Again, he broke the law, and it will be proven in a court of law now.

This is it in a nutshell.

@Krugerrand please take a moment to read this and maybe take your completely partisan blinders off for a moment.

While there are certainly some people who hang around here and peddle false/negative information in an effort to shake confidence in Tesla, many people here who are being critical own Tesla products and want Tesla to succeed.

Biggest obstacle to Tesla's success, at this point in time, very well might be Elon Musk's enormous ego. Board can say they back him, what the hell else are they going to say?

 

[jboy210]

The Jobs who got forced out deserved to get forced out. Wandering in the desert made him stronger. Musk hasn't been humbled like that and it's why he's made a lot of these kinds of mistakes in the first place.

Remember though, once Jobs was gone, Scully ran the company into the ground and Apple was almost gone. I worked the MS at the time in buildings formerly occupied by Apple. MS gave Apple a money so MS would not be declared a monopoly. In addition we were told to create new versions of Office products for Apple. Things were so bad at Apple they had to rent space in buildings in the parking lot at Infinite Loop to a bookstore.

I am not sure Tesla will find such as a white knight (or gray knight) to keep things afloat if the SEC hits the company with a massive fine. In vision of a perfect my world, Larry or Sergey would be just a knight and Tesla would be linked with Waymo.

 

[TheTalkingMule]

We really are living in a dream world if we think a company will be allowed to utterly disrupt the fossil fuel economic structure that's built up so much wealth over the last 150 years. Not only does the looming "Tesla reality" end the ability of countries and corporations to hoard energy resources and keep the masses at arm's length, it might just end the investment backdrop that goes along with it. Did we honestly think these oil tyrants and their finance leeches would leave any bullets in the clip?

I remember anxiously awaiting SolarCity earnings calls excited for soft costs to drift downward as the US solar market scaled and the vastly superior renewables+storage structure spread. LOL....sales cost simply kept going up and up until it eventually choked the business model to death. Was it execution on the SCTY side that doomed that first effort? The marketplace? Nope, it was the governor of Nevada who signed a deal with SCTY to make Nevada their national sales hub then turned around and eliminated nearly all grid compensation for solar homeowners. And of that hadn't done the trick, it would be something else.

Of course the people of Nevada didn't stand for it and in response have begun deregulation of their monopoly energy marketplace. The governor quickly backpedaled reinstating net metering, but the damage was done and SCTY would be absorbed into TSLA.

Shorts are now being blamed for everything around TSLA, but in the background I'm sure it's quite a bit broader. No one wants this to happen. It literally destroys the source of wealth these people have been feeding off for more than a century. Absorbing energy for all electricity and transport needs rather than buying it from one of several giant piles MUST NOT BE ALLOWED.

I felt fairly safe buying SCTY shares since I knew Elon wouldn't let the US solar market die, it was too important to the mission. Fast forward a couple years and it's not SCTY that's in the crosshairs, but the entire mission itself. Fortunately there's absolutely zero chance Elon gives up.

Here's hoping he's talking to China or the Saudi's as we speak and a new tweet is in the works: "Seriously considering taking Tesla private at $419. Funding secured."