Musk Ridicules SEC in Tweet Storm Days After Settling Suit

Gladys Abbott
October 5, 2018

Musk appears to have run afoul of the $20 million settlement he recently reached with the Securities & Exchange Commission, with a tweet that called the federal regulator the "Shortseller Enrichment Commission" and mocking the "name change".

Musk's cheeky tweet came only hours after a judge ordered Musk and the SEC to justify their settlement over his false tweet last month that he'd secured funding to take the company private. After falling 4.4 percent during the regular trading session, Tesla's stock price fell by another two percent in the minutes after Musk tweeted.

Tesla Chief Executive Elon Musk stands on the podium as he attends a forum on startups in Hong Kong, China January 26, 2016.

Tesla CEO Musk may have settled with the U.S. Securities and Exchange Commission over that August tweet claiming he had the funds to take his electric vehicle company private, but that hasn't stopped the eccentric billionaire from tweeting.

The SEC's complaint was sent out last week and suggests Musk tweeted the take-private proposal, in part, to lift the stock of the company and therefore publish the short sellers.

A federal judge is still considering the settlement of the SEC lawsuit.

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Tesla also accepted a $20m fine, despite not being charged with fraud.

Another Tesla bull, Gerber Kawasaki CEO Ross Gerber, was more blunt in expressing his disapproval of Musk's post.

Musk's sarcastic tweet could cause Nathan to reject the settlement if it gives her reason to believe that he "has no intention or ability to change his conduct", said Erik Gordon, a business professor at the University of MI.

Musk's tweet on Thursday received more than 2,500 responses, with some users questioning the billionaire's judgment.

"In and of itself it's not an ominous sign", said Jordan Thomas, a partner at Labaton Sucharow and former SEC lawyer.

The settlement still needs approval from the courts. However, the government was annoyed with Musk's decision to bail on the original agreement so they doubled down on the conditions for the new settlement.

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