Published: Sun, October 07, 2018
Money | By Wilma Wheeler

Tesla’s Musk mocks U.S. agency just days after settling with it

Tesla’s Musk mocks U.S. agency just days after settling with it

Chief Executive Elon Musk on Thursday mocked the U.S. Securities and Exchange Commission, hours after a federal judge ordered him and the regulator to justify their settlement of securities fraud charges.

But in a tweet late on Thursday, Mr Musk described the SEC as the "Shortseller Enrichment Commission", saying it was doing "incredible work".

The SEC has responded by denying any plans for a name change, but won't be drawn on the content of the Tweet.

As part of Musk's settlement with the SEC, Tesla is supposed to monitor its CEO's Twitter posts, but only those that have to do with company news.

He has used Twitter to criticize short-sellers betting against his company.

As a result, SEC then sued Musk over the tweet, which the USA agency said was "misleading" and caused "significant market disruption".

The commission is asking the court for an order stopping him from making false and misleading statements along with repayment of any gains as well as civil penalties.

Shares of the company (TSLA), down around 14 percent this year but still up nearly 30 percent since the start of 2017, were last down 6.9 percent at $262.63.

Even though Musk's Twitter post appears to violate the spirit of the recent settlement, the SEC is largely powerless to stop Musk's tirades until the settlement is approved by Federal Judge Alison Nathan of the Southern District of NY, which could take several weeks.

The stock's decline follows a series of tweets from CEO Elon Musk on Thursday night. Tesla shorts were up more than $1.2 billion after the SEC filed its lawsuit against Musk, according to S3 Partners data from September 28. Tesla also had to pay a $20m fine, despite not accepting charges. And, why not? It should be noted that Tesla has just completed its third quarter and Musk promised that the company would deliver a profit this time.

Peter Haveles, a partner in the Trial and Dispute Resolution Practice Group, said Musk's tweets showed his lack of self discipline and puts intense pressure on Tesla board. But if you looked over Musk's Twitter feed - full of tweets about flamethrowers and flights to Mars - and "you took it too seriously", that's "80 percent on you".

In June, Musk wrote that shorts "have about three weeks before their short position explodes"-presumably a prediction that Tesla's strong quarterly results would cause Tesla's stock to rise. Elon Musk's erratic behaviour suggests that he sees it the same way".

The SEC has so far declined to comment on either of Musk's tweets. The SEC also alleged that Musk rounded up the buyout price for Tesla to US$420 a share to amuse his girlfriend at the time with a marijuana-culture reference.

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