03 Sep Musk “Pokes the Bear” of the US Securities and Exchange Commission (SEC)
By now, many of us have heard about the issues that Elon Musk has had with securities fraud and specific allegations against him for much of what he has done with his company, Tesla. As a part of the settlement that they came to, the SEC said that Musk cannot say anything about the SEC being wrong or that what happened was untrue – but now, Musk has been using social media to bash the SEC and their rules and regulations. Is that problematic, especially when you look at how it could affect Tesla in the future?
The fact is, the posts and tweets he put up seem contrary to what Tesla as a company would want. Bad faith is a bad thing, and there are some questions as to whether or not he is now breaking Delaware state law – that is, laws associated with “the duty of loyalty” and how those who run companies need to not do things that would cause their business to go under. It seems that, with these actions, Musk is putting his interests (and anger) ahead of the interests of Tesla and, as the director, that’s problematic.
In short, Tesla seems to be testing his boundaries with his interactions online. What is, and isn’t, he able to do within the contexts of the settlement? He is the face of Tesla – but some business law professionals believe that his is indispensible to Tesla, and that’s why he’s not going to face any sort of issue with them as a result of what is going on there. Will the SEC come after him with fines and fees as a result of his actions here? That’s what remains to be seen in the future, and many of us who are in business law will be continuing to watch.