The SEC exists to protect shareholders and ensure fair markets. Instead of protecting shareholders, however, they have become a risk-factor for retail investors that needs to be planned for and mitigated. This state of affairs constitutes gross negligence on the part of the SEC.
This post is not about Elon Musk’s tweets or tweeting habits, and does not rule on whether or not his tweets were appropriate, this is about whether the SEC’s response was appropriate.
Consider the following facts regarding the “420, funding secured” incident:
(1)In the “420” tweet incident the SEC’s actions moved the stock far more than Elon’s tweet, I personally suffered significant financial loss as a direct result of the SEC’s actions.
(2) Elon’s accepted punishment for the “420” incident was more severe than that of Elizabeth Holmes, the biggest fraud of the last decade. Elon accepted this punishment only because the SEC was holding his shareholders hostage, causing enormous pressure on him to cave to the SEC from his shareholders (myself included).
(3) The SEC is aware of their ability to move markets by their actions, and is aware of other options to correct or restrain Elon’s twitter habits.
Consider the following facts regarding the “500k production” incident:
(1) In the “500k” tweet incident the SEC’s actions moved the stock far more than Elon’s tweet.
(2) The tweet was not sent during market hours and had no significant or lasting effect on AH prices. No new information was divulged.
(3) The SEC is aware of the effect their actions would have on the value of the stock.
This situation is made all the more eye-brow raising by the lack of public consequences for the numerous very suspicious options plays that appear to front-run material events such as the Moody’s downgrade last year or the CR Model 3 recommendation withdrawal. Most damning is that the SEC’s own announcements have been front-run in significant fashion, suggesting SEC collusion with short sellers. For example, 17,294 put options with a 3 week expiry that were $200 OTM were purchased shortly before the SEC announcement regarding the “420” incident. That is a very unusual volume of OTM puts unless someone is expecting a sharp move in a narrow window. These actions occur *in the context of* known conflicts of interest by certain members of the SEC, such as Steven Peikin, Co-Director of the SECs division of enforcement who was managing partner at Sullivan & Cromwell LLP’s Criminal Defense and Investigation Group where he spent significant time working for British Petroleum and rival auto manufacturers. Additionally, SEC chair John Clayton previously did work for rival auto manufacturer Volkswagen.
Given the above it is hard not to conclude that one or more of the following 4 options is the case:
(1) The SEC is motivated by a personal animus against Musk.
(2) The SEC is no longer interested in protecting investors and ensuring fair markets.
(3) SEC personnel have a financial, personal or political interest in Tesla failing.
(4) The SEC is not aware of their effects on the market, this would be tough to believe and would constitute negligence.
Also conspicuously absent is any SEC action against short-sellers, some of whom have been tweeting defamatory information every 15 minutes (no exaggeration) for multiple years in an attempt to affect the stock and consumer sentiment. Some of these same shorts have been known to receive insider information prior to material events, see here:
Diego on Twitter
Given that shareholders of Tesla have unfairly suffered loss due to SEC actions I would like of explore the idea of legal action against the SEC to prevent further abuses of power. I am not a lawyer but I know we have lawyers in this group and would like to hear their opinions.
This post is not about Elon Musk’s tweets or tweeting habits, and does not rule on whether or not his tweets were appropriate, this is about whether the SEC’s response was appropriate.
Consider the following facts regarding the “420, funding secured” incident:
(1)In the “420” tweet incident the SEC’s actions moved the stock far more than Elon’s tweet, I personally suffered significant financial loss as a direct result of the SEC’s actions.
(2) Elon’s accepted punishment for the “420” incident was more severe than that of Elizabeth Holmes, the biggest fraud of the last decade. Elon accepted this punishment only because the SEC was holding his shareholders hostage, causing enormous pressure on him to cave to the SEC from his shareholders (myself included).
(3) The SEC is aware of their ability to move markets by their actions, and is aware of other options to correct or restrain Elon’s twitter habits.
Consider the following facts regarding the “500k production” incident:
(1) In the “500k” tweet incident the SEC’s actions moved the stock far more than Elon’s tweet.
(2) The tweet was not sent during market hours and had no significant or lasting effect on AH prices. No new information was divulged.
(3) The SEC is aware of the effect their actions would have on the value of the stock.
This situation is made all the more eye-brow raising by the lack of public consequences for the numerous very suspicious options plays that appear to front-run material events such as the Moody’s downgrade last year or the CR Model 3 recommendation withdrawal. Most damning is that the SEC’s own announcements have been front-run in significant fashion, suggesting SEC collusion with short sellers. For example, 17,294 put options with a 3 week expiry that were $200 OTM were purchased shortly before the SEC announcement regarding the “420” incident. That is a very unusual volume of OTM puts unless someone is expecting a sharp move in a narrow window. These actions occur *in the context of* known conflicts of interest by certain members of the SEC, such as Steven Peikin, Co-Director of the SECs division of enforcement who was managing partner at Sullivan & Cromwell LLP’s Criminal Defense and Investigation Group where he spent significant time working for British Petroleum and rival auto manufacturers. Additionally, SEC chair John Clayton previously did work for rival auto manufacturer Volkswagen.
Given the above it is hard not to conclude that one or more of the following 4 options is the case:
(1) The SEC is motivated by a personal animus against Musk.
(2) The SEC is no longer interested in protecting investors and ensuring fair markets.
(3) SEC personnel have a financial, personal or political interest in Tesla failing.
(4) The SEC is not aware of their effects on the market, this would be tough to believe and would constitute negligence.
Also conspicuously absent is any SEC action against short-sellers, some of whom have been tweeting defamatory information every 15 minutes (no exaggeration) for multiple years in an attempt to affect the stock and consumer sentiment. Some of these same shorts have been known to receive insider information prior to material events, see here:
Diego on Twitter
Given that shareholders of Tesla have unfairly suffered loss due to SEC actions I would like of explore the idea of legal action against the SEC to prevent further abuses of power. I am not a lawyer but I know we have lawyers in this group and would like to hear their opinions.
