Sen. Elizabeth Warren wants the U.S. Securities and Exchange Commission to investigate Tesla over potential conflicts caused by Elon Musk running the company and the social media platform Twitter simultaneously.
The Massachusetts Democrat sent a letter to SEC Chairman Gary Gensler on Monday saying she was concerned that Mr. Musk’s leadership of both companies could create conflicts of interest, harm Tesla shareholders and result in the misappropriation of corporate funds.
Ms. Warren said Tesla’s board of directors appeared to not have upheld its legal duty to ensure Mr. Musk acted in Tesla’s best interest and she wanted the government to intervene.
“The Board also does not appear to have adequately disclosed concerns about these issues to investors, undermining shareholders’ ability to make informed voting and investing decisions and to hold their fiduciaries accountable,” Ms. Warren said. “The Board’s inaction and inadequate disclosures, and the close relationships of several Board members to Mr. Musk, raise questions about the effectiveness of their corporate governance and potential violations of securities laws.”
Ms. Warren said she understands Mr. Musk can run Twitter as a private company how he wishes and that the Tesla board’s legal obligation to shareholders is “largely a question of state law” but she wants the SEC to probe possible broken securities laws and exchange rules.
“Tesla is publicly owned, and Mr. Musk and the Board have responsibilities to shareholders and the public in their management of the company,” Ms. Warren wrote. “Mr. Musk’s wealth — and his relationships with Board members — do not shield him or the Tesla Board from meeting basic SEC governance and disclosure rules.”
Mr. Musk’s posts on Twitter have previously landed him and Tesla in hot water with the SEC.
Mr. Musk agreed to settle a securities fraud charge with the SEC in 2018 after the agency alleged his tweets about taking the company private violated the law. The SEC later investigated whether Mr. Musk’s 2021 tweets questioning followers about whether to sell Tesla stock violated the agency’s 2018 agreement.
The Tesla CEO has since unsuccessfully attempted to back out of the 2018 agreement. A federal appeals court ruled in May 2023 that he must abide by the earlier agreement that required a Tesla attorney to approve some tweets.
The SEC and Tesla did not immediately respond to requests for comment from The Washington Times. Twitter auto-responded with a poop emoji, which is a common response to new media inquiries since Mr. Musk took over the company.
• This article was based in part on wire service reports.
Source:Washington Times
