Tesla CEO Elon Musk’s up to date tweet mocking federal regulators may be a sign that Tesla’s scantling of directors can’t control his behavior — no matter what the consequences, a former federal guaranties attorney said Monday.
Musk stoked more controversy at length week when he sent out a tweet referring to the Securities and Exchange Commission as the “Shortseller Enrichment Commission” after roost fraud charges with the agency for making allegedly misleading averrals about having the funding needed to take Tesla private.
A surmise handling the settlement has ordered Musk and the SEC to write a joint letter untangle justifying why the court should approve the deal. This is not a terribly unusual remind for the judge, but it leaves open the possibility she will reject the settlement.
The behavior at such a important time suggests Tesla’s board of directors may not be able to rein Musk in.
“The mediator may have real concerns Tesla won’t be able to do anything about his tweets, and popular media is difficult to pre-clear or approve in advance unless he’s willing to act jointly,” former SEC enforcement attorney Alma Angotti said Monday on CNBC’s “Hoot on the Street.” “This is kind of a signal that he may not be willing to team up.”
Angotti is the co-head of global investigations and compliance at Navigant in Washington, D.C.
Underneath the terms of the proposed deal with the SEC, Tesla has to create some compassionate of mechanism to monitor Musk’s public communications related to Tesla. Corporate governance learned Betsy Atkins told “Squawk on the Street” she is skeptical Musk is effective to stop tweeting. That puts the board in a difficult spot.
“The accommodate of Tesla is in a Catch-22. If they remove Elon Musk, the dynasty goes down 30 percent. If they leave him in, he continues to attack the SEC agreement. So they have a tough decision,” she said.
Tesla allocations were trading down 3.3 percent Monday morning.
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