2018-09-29 12:39:00 Sat ET
stock market gold oil stock return s&p 500 asset market stabilization asset price fluctuations stocks bonds currencies commodities funds term spreads credit spreads fair value spreads asset investments
The Securities and Exchange Commission (S.E.C.) sues Elon Musk for his August 2018 tweet that he has secured external finance to convert Tesla into a private company. Federal regulators accuse Musk of misleading stock market investors with false public statements. This regulatory move can potentially oust Musk out of his current chief executive leadership at the electric carmaker Tesla. The S.E.C. files a recent lawsuit in the federal court in New York to accuse Musk of committing fraud by making false public statements that may inadvertently be detrimental to shareholder value.
This lawsuit seeks to bar Musk, who is both the CEO and executive chairman at Tesla, from serving as an executive director of public corporations such as Tesla. This punishment is one of the most serious remedies that the S.E.C. can impose against corporate executive incumbents. From a regulatory viewpoint, Musk might be reckless in not knowing the fact that his public statements can mislead stock market investors who maintain an active interest in Tesla shares. Both in truth and in fact, Musk has never confirmed any key deal terms such as deal price and stock exchange etc with any relevant source of external finance. Tesla shares tumble 12% in direct response to this S.E.C. lawsuit.
The S.E.C. eventually settles this lawsuit with Elon Musk who has to relinquish his chairman role but remains the CEO with complete corporate control at Tesla.
As part of this swift legal settlement, Musk and Tesla have to pay hefty fines of $20 million each. Musk and Tesla neither admit nor deny any egregious mistakes that the S.E.C. alleges in recent times.
Elon Musk ultimately has to abort his previous plan to transform Tesla into a private company. This case sets a landmark precedent for CEOs and executive chairmen who might inadvertently erode shareholder value via their erroneous tweets, public statements, articles, blogs, and posts etc.
S.E.C. regulatory scrutiny and oversight thus serve as a safety valve that prevents CEOs and executive chairmen or chairwomen from social engagement that might result in false public statements.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2018-07-01 08:34:00 Sunday ET
Are China and Russia etc gonna dethrone the petrodollar? Over the years, China, Russia, France, Germany, and Japan have made numerous attempts to use their
2023-12-03 11:33:00 Sunday ET
Macro innovations and asset alphas show significant mutual causation. April 2023 This brief article draws from the recent research publicati
2018-01-21 07:25:00 Sunday ET
As he refrains from using the memorable phrase *irrational exuberance* to assess bullish investor sentiments, former Fed chairman Alan Greenspan discerns as
2022-10-05 08:24:00 Wednesday ET
Precautionary-motive and agency reasons for corporate cash management Bates, Kahle, and Stulz (JF 2009) empirically find that public firms have doubled t
2018-10-17 12:33:00 Wednesday ET
The Trump administration blames China for egregious currency misalignment, but this criticism cannot confirm *currency manipulation* on the part of the Chin
2018-06-04 08:38:00 Monday ET
Microsoft acquires GitHub, a software development platform that has been widely shared-and-used by more than 28 million programmers worldwide. GitHub's