The latest involves the SEC reportedly being unhappy with Tesla's chief executive, Elon Musk, for opting to attend a rocket launch rather than adhering to a scheduled deposition regarding his Twitter activities. It shows how the incident has ratcheted up the tension between the regulatory body and the billionaire entrepreneur.
The SEC had subpoenaed Musk for testimony in light of his role in tweeting and other public statements relating to the stock prices and market activity in Tesla's securities. Instead, Musk never appeared for deposition but went to attend the launching of rockets-a fact that does not sit well with the Commission.
According to sources close to the issue, the primary concern of the SEC is Musk's continued use of Twitter to disclose material information about Tesla. Tweets about production targets and stock valuation, among other company issues, had previously created chaos in the market, leading the regulator to demand an explanation on whether Musk is following standards in the operation of the markets.
Musk has also had a contentious relationship with the SEC in the past. In 2018, he received fraud charges for a tweet claiming to have secured funding to take Tesla private. Part of the settlement included Musk taking a back seat as Tesla chairman and vetting his tweets with legal counsel. The move didn't deter the SEC from keeping Musk's social media run-ins under close watch.
The latest no-show in the deposition hearing has only fanned the flames. SEC Chairman Gary Gensler said everybody is bound by regulatory norms and that no individual, whatever the length of his stature or height of his achievement, is above the law. He repeated the message of transparency and accountability most heard when it comes to public companies whose businesses affect a large number of investors.
Elon Musk has not yet replied to the criticism thrown by the SEC. However, it is expected that his lawyers will come forward with a response, maybe deliberating over a new date for the deposition. As legal experts said, though Musk's failure of appearance at the deposition is not something to be taken lightly, it might not lead to serious consequences as long as it is followed by complete compliance.
As this saga continues to unfold, the world is watching what Musk and the SEC are doing in this latest chapter of their saga. The incident has wider ramifications related to the use of social media by high-profile executives and clearer regulatory frameworks that control such activities.
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Author: Emily Collins
