Tesla CEO
Elon Musk trolled the U.S. Securities and Exchange Commission in a tweet
Thursday afternoon, poking the bear that just days before had agreed to settle
securities fraud charges against the billionaire entrepreneur.
The tweet,
sent out at 1:16 pm PT Thursday, says:
“Just want
to that the Shortseller Enrichment Commission is doing incredible work. And the
name change is so on point!”
The SEC
declined to comment. Tesla has not yet responded to a request for comment.
Tesla
shares, which closed down 4.4%, fell another 2.5% in after-hours trading before
recovering slightly.
Musk later
apologized. But not for the mocking tweet. Instead he doubled down on this
trollery and apologized for the typo.
Not all of
his supporters appreciated the tweets, calling the CEO out for hurting the
stock. Musk’s advice: “Hang in there. If you are truly long-term, it will be
fine.”
Just days
before, Musk settled a securities fraud complaint filed by the SEC that could
have been disastrous for Tesla and its shareholders. Musk agreed, in a
settlement reached on September 29, to step down as chairman of Tesla and pay a
$20 million fine.
Despite the
penalties, it has been largely viewed as a sweet deal that allowed Musk to keep
his CEO position as well as a seat on the board. Musk didn’t have to admit or
deny the SEC’s allegations either.
Musk is
supposed to resign from his role as chairman of the Tesla board within 45 days
of the agreement. He cannot seek reelection or accept an appointment as
chairman for three years. An independent chairman will be appointed, under the
settlement agreement.
Tesla agreed
to pay a separate $20 million penalty, according to the SEC. The SEC said the
charge and fine against Tesla is for failing to require disclosure controls and
procedures relating to Musk’s tweets.
The SEC
alleged in its complaint that Musk lied when he tweeted on August 7 that he had
“funding secured” for a private takeover of the company at $420 per share.
Federal securities regulators reportedly served Tesla with a subpoena just a
week after the tweet. Charges were filed just six weeks later.
The charges
were filed after Musk and Tesla’s board abruptly walked away from an agreement
with the SEC. The board not only pulled out of the agreement, it issued a bold
statement of support for Musk after the charges were filed. The NYT reported
that Musk had given an ultimatum to the board and threatened to resign if the
board pushed him to settle.
A settlement
was eventually reached anyway, albeit with stiffer penalties than the original
agreement.
Still, the
agreement was treated as good news by Wall Street, which sent Tesla shares
higher and erased previous losses caused by the SEC complaint.
The series
of tweets on Thursday followed an order by a federal judge that asked the SEC
and Tesla to submit a joint letter explaining why the court should approve the
consent judgment.
U.S.
District Judge Alison Nathan, who wrote that the district court must determine
whether as consent judgment is “fair and reasonable,” gave the two parties
until October 11 to submit the explanation.
It’s not
clear if Musk’s tweets are a reaction to the judge’s order.
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