Elon Musk’s tweets have put him in the hot water with shareholders – again. This time, he and the Tesla board are staring at a suit from a disgruntled investor who claims that some of the CEO’s tweets violate a 2019 settlement that Musk struck with the Securities and Exchange Commission, intended to advance his public missions. about the company to dampen.
For those who may not remember, in 2018 the SEC beaten Elon Musk with a hefty string of fraud charges after Tesla’s CEO tweeted that he was considering taking the company private if the stock price hit $ 420 a share. As the later lawsuit made clear, he had no financing details to back up the bad tweet, which led to a settlement with the SEC that netted Musk and Tesla themselves $ 20 million. The resulting deal also made mandatory that Musk will step down as chairman of the company for at least three years, and that an independent committee will be appointed to dampen any public “communications” of Musk that may be relevant to shareholders, including bad tweets.
But as anyone who’s been following Musk’s Twitter feed can attest, those bad tweets haven’t gone anywhere. That’s the topic of the latest series (which you can read here), levied against Musk by Chase Gharrity, an investor who claims that the CEO’s “increasingly erratic” behavior on Twitter has resulted in “millions of dollars in losses” for him and his fellow Tesla shareholders. Tesla’s board of directors is also named as defendants in the case for Musk’s failure to govern after the original SEC decision.
It’s worth noting that not long after reaching the initial settlement, the SEC fights against Musk rekindled after Musk tweeted Tesla’s production schedule for the year, prompting the commission ask a judge to keep Musk in contempt of court. Meanwhile, the bad tweets have only continued. Among the classics brought up in Gharrity’s lawsuit includes Musk’s May 2020 “Tesla stock price is too high imo” tweet that led to Tesla shares to fuel with about $ 13 billion.
We’ve reached out to Tesla for comment on the matter and will update here when we hear back.
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