Tesla boss Elon Musk mocks US regulator days after settlement for alleged securities fraud

‘Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work,’ the chief executive tweeted

Ben Chapman
Friday 05 October 2018 09:52
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Elon Musk branded 'a liar' by investor as US regulators seeks to oust Tesla boss

Shares in Tesla fell after chief executive Elon Musk mocked US regulators in a tweet just days after reaching a multimillion-dollar settlement over alleged securities fraud.

Mr Musk poked fun at the US Securities and Exchange Commission (SEC), referring to it as the “Shortseller Enrichment Commission” in a tweet on Thursday night, in reference to the many investors betting against Tesla.

“Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work,” Mr Musk tweeted. “And the name change is so on point!”

Tesla shares sank 4.4 per cent on Thursday and a further 2 per cent in after-hours trading.

The SEC charged Mr Musk with securities fraud last week after another controversial tweet in which he claimed he had secured funding to take Tesla private for $420 (£322) a share.

This caused the company’s value to spike temporarily but the SEC alleged that the comment was misleading because Mr Musk had only had preliminary discussions with an investor at an undisclosed price.

The spike in price hurt many shortsellers – those betting Tesla’s value would fall – who Mr Musk has heavily criticised.

But the action brought by the SEC then dragged Tesla’s share price down as investors feared for the future of the company without its chief executive, meaning the tweet ultimately had precisely the opposite effect to what Mr Musk had apparently intended.

His latest controversial tweet came just hours after a federal judge ordered him and the regulator to justify the settlement they reached, which allowed Mr Musk to remain in place as chief executive.

US District Judge Alison Nathan in Manhattan ordered Mr Musk and the SEC to explain within a week why their settlement was fair and reasonable and would not hurt the public interest.

Ms Nathan has regularly requested such letters in similar circumstances.

Mr Musk agreed to pay a $20m (£15.4m) fine, and step down as Tesla’s chairman for three years, to settle the charges that could have forced him to leave the company completely. The company also accepted a $20m fine, despite not being charged with fraud.

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