This is a pretty mild punishment compared to the sorts of things the SEC has the power to do, like getting Musk banned for life from any executive position in any company, forcing him to get rid of all his ownership in Tesla, and fining him many billions of dollars.
That the SEC settled so quickly and for so little makes me think they believed they couldn't get any more to stand up in court. I assume that Musk refused a more harsh earlier settlement because he was aware of this. So he played chicken with the SEC, and the SEC backed down.
It would be really good, though, if Musk learned a lesson from all this and decided to be more responsible in his communications.
> The Securities and Exchange Commission announced today that Elon Musk, CEO and Chairman of Silicon Valley-based Tesla Inc., has agreed to settle the securities fraud charge brought by the SEC against him last week. The SEC also today charged Tesla with failing to have required disclosure controls and procedures relating to Musk’s tweets, a charge that Tesla has agreed to settle.
Essentially by agreeing to pay for the charges, he already told us he committed securities fraud without admitting it.
Are there any previous examples of someone doing something similar to what Musk did and the punishments they received? I don't normally follow SEC cases, but this seems like a pretty extreme potential punishment compared to the slap on the wrist that many people were predicting.
From memory SEC fined Musk and Tesla and Musk tried playing hardball with them and the SEC immediately doubled the fine. They were willing to start an escalation and Musk finally backed down.
Sounded to me like he was not in a strong position last time and another blatant violation is unlikely to be an easy walk in the park.
The share price has immediately moved, this is just reckless behaviour.
I’m not sure Musk has seen the last penalty for that tweet. The SEC has been corresponding with Tesla about Musk’s noncompliance with the court-ordered legal review of his tweets.
That's a weird narrative you are saying. SEC settled quickly and little because this is not a "bad" security fraud. There's little reason to punish him harshly since he probably doesn't have malicious intent. The punishment has to fit the crime after all. No reason for the SEC to destroy a person and company over a tweet. They have to have some punishments though because the fraud was too obvious.
The Thursday's failed settlement was slightly better that this one too. SEC's case is likely to hold up in court because Musk's recklessness was too obvious but the court's punishment would probably be similar to the settlement.
I think there's a bit of overexcitement going on in this thread; it doesn't look to me like Musk is going to jail on this one.
This part is interesting:
> The SEC had crafted a settlement with Musk that it was preparing to file Thursday morning, the Wall Street Journal reported, citing unidentified people familiar with the matter. Musk’s lawyers called SEC lawyers to say they were no longer interested in proceeding with the agreement, it said.
If his lawyers had a settlement lined up, and then retracted it, that means that they are confident they can win a better outcome in court. The deal they were going to cut did not involve Musk going to jail, so the outcome that Musk's expensive lawyers are betting on by retracting the settlement presumably also doesn't involve that.
These arguments aren’t going to sway a judge or the SEC, it almost feels amateurish. Of course I presume that Musk and Tesla’s lawyer are very competent, but they have to work with what they’re given. I suppose the brief can be seen as red meat for his most loyal base, but so what? This isn’t a political campaign or a popularly contest, and it almost seems calculated to piss off the regulator that has Musk’s balls in a vise.
Musk just confuses the hell out of me. On one hand he started SpaceX, which is a ballsy and amazing company on track to bring launch costs down over the long haul. He seems to have has the wisdom to put competent people in charge of it, and then stick to the PR game he sometimes excels at. On the other hand we have Tesla, which he burdened with SolarCity and his own bizarre behavior. It’s a really weird situation, and if he didn’t have such a favorably stacked board and s grip on the company it’s hard to imagine he’d still be around.
Weirdly the only realistic way he loses his job at Tesla is if the SEC kicks him all the way off, and he’s practically waving a red flag at them! What is the point of this? His ego can’t possibly be thst fragile, and surely someone in his life can tell him to shut up.
The proposed punishment is statutorily allowed for the infraction. Sadly, in this climate, it's not clear whether this is standard operating procedure for this, though, or whether a particularly vindictive response because of some political slight Musk may have committed towards the administration or the SEC.
Why wouldn't being banned from serving as CEO or Chairman of any publicly traded company for some certain amount of time be enough? Why wouldn't increasing the fine be enough? Say it were $40m, $80m, $100m.
You can punish someone without throwing them into a box. I don't see how that benefits Musk or society in any way. If he's unlikely to do anything like this again, he had power taken away from him, and investors recooped losses, what possible gain is there?
He's lucky. If he were a small time person he would be in jail by now. SEC only goes after low hanging fruit, so you know that this was an easy case for them. Musk deserves it for his stupidity but SEC isn't any protector of the masses by any means.
The SEC isn't forcing anything, as such, but public information about being investigated for something like this, in a public company, might well affect the market's willingness to lend to you.
Musk has also said he is going to launch legal action on this. Because that's almost exactly what happened, and it is unfair. So you are correct, and this saga probably still has more to go.
What's funny is almost anyone on the planet couldn't go up against someone like the SEC, which is why they can get away with this. Good on Musk for doing it.
The sec sued asking for punishment for violating the agreement. The judge basically said, ya, no, but why don't you guys write up a new one that everyone agrees on the meaning of. And that is what happened.
A settlement where you get literally nothing that you asked for is a loss not a win.
Edit: I just realized you linked to the wrong settlement. One sec, I'll find the right one for you.
It seems that the SEC didn't release any press releases over their loss (shocking, I know) - but here is an article: https://www.bloomberg.com/news/articles/2019-04-26/musk-sec-... - you could also refer to the original article you posted in your original incorrect claim that Musk violated the updated agreement.
Well, it seems to me that the SEC has been extremely lenient for some time now and it’s not exactly news. When was the last time a CEO of a big corp got busted, not to mention got jail time? It applies to the whole supervisory landscape in the US as well, not just the SEC. So I’m not sure how much it has to do with Musk’s perception in the popular culture. The “pedo” case maybe more so, but the SEC part I’m not so sure of.
A bit anticlimactic. The only reason the SEC brought charges publicly was because Musk refused the first settlement offer (with similar conditions) anyways.
That the SEC settled so quickly and for so little makes me think they believed they couldn't get any more to stand up in court. I assume that Musk refused a more harsh earlier settlement because he was aware of this. So he played chicken with the SEC, and the SEC backed down.
It would be really good, though, if Musk learned a lesson from all this and decided to be more responsible in his communications.
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