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?
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.
As much as I would love to see Musk imprisoned, I don't see how those things would lead to jail time. Are you saying he might be accused of defrauding investors? I think that would be a pretty hard sell in court.
Realistically? An adverse court ruling would be headline news, so Musk can't bury the news. A fine would be easier to enforce (you can basically go to the people who pay him and demand that they pay you instead).
However, given the dickishness that he has already displayed, I quite like the (completely unrealistic) idea of the penalty being that Twitter acquires ownership of Tesla instead, whereupon they kick Musk out as CEO.
There's a saying that goes something like, "If a law is enforced by a small fine, the law doesn't exist at all."
That's true for all laws for Musk. We currently don't have any form of law enforcement that would result in material fines for him, especially from the SEC.
That's not a political situation. It has transcended many administrations. If Musk were to receive a painful fine, a judge would likely say it was excessive when compared against his crime.
For example, if Musk causes $10B of damage to someone else and is fined $20B for it, it's still not enough to really harm him that much. And that would be (by far) the largest fine assessed against an individual in US history.
The problem is that Musk has accumulated so much wealth that he is untouchable. We should never have allowed any single person to accumulate that much power in the first place.
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.
He acts like he’s above the law, which you are in a way when you’re a billionaire. Money is power. You don’t even have to be a billionaire (see: POTUS and pre presidency crimes). The system is of course tilted towards those with means, it’s ridiculously silly to propose otherwise.
Musk is going to get off with slap on the wrist (relatively), with damages due of single digit millions at most. De minimis.
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.
I'm not particularly a fan of Musk, but the purported objective of SEC enforcement is to protect investors. If (as I read a day or two ago) the stock plunged on news of enforcement, then it's reasonable to question whether punishing him makes sense. Are the stockholders really better off with less (or no) Musk? Maybe, but does the SEC know better than the market? In any case, I'm not sure how or if "equal justice" is relevant.
Can we legally get fines large enough that it would actually hurt Musk or people of his economic stratum financially? The Supreme Court has put some pretty hard limits on civil damages awards over the years and they've just gotten more business friendly since those courts.
I guess my curiosity is why Elon Musk feels like he is entitled to defy the law when any of the other businesses mentioned here wouldn’t dare. Jailtime for him, or why should anyone obey?
Sure, I'd agree with this argument if he sexually assaulted someone or got a DUI or something. Nobody is "too valuable to go to jail".
But jail time for a random tweet seems like overkill, and removing him from Tesla for this does feel like it would be a net negative. He was heavily fined, which seems more fair.
The SEC could seek to bar him from being an officer or director of a public company. That would be independent of any criminal charges that might be filed. Elizabeth Holmes agreed to similar terms when she settled with the SEC. In some ways I would agree that the downside for him might be limited if he can convince investors in SpaceX that they might need to wait out any imposed ban for a liquidity event.
While I agree that there are billions in potential upside in Tesla the potential return on that tweet was always negative given what was likely to follow.
But a few billion dollars of market cap and a few years of jail time are the price of being found guilty of what Musk is insinuating.
If I stood to lose $100M, I wouldn't do the dirty work myself, I'd hire someone else to do it for whom taking that risk for $100K (or whatever) is worth the risk - that could be several years (tax-free) pay for some people.
I'd use several levels of anonymization or maybe redirection to try to keep my identity hidden (and I doubt I'd be successful, but it takes a certain level of arrogance to hire someone to sabotage a company because you bet against it and might be losing)
And not just Musk. Big companies regularly put themselves in a position to be fined by regulators. Either their lawyers are stupid (they probably aren't) or it's just a cost of doing business (it probably is).
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?
reply