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.
2019-06-03 11:31:00 Monday ET
The Sino-U.S. trade war may be the Thucydides trap or a clash of Caucasian and non-Caucasian civilizations. The proverbial Thucydides trap refers to the his
2017-01-17 12:42:00 Tuesday ET
Former Treasury Secretary and Harvard President Larry Summers critiques that the Trump administration's generous tax holiday for American multinational
2018-05-08 13:39:00 Tuesday ET
The Trump administration weighs the pros and cons of a potential mega merger between AT&T and Time Warner. Recent stock prices show favorable trends for
2018-07-11 09:39:00 Wednesday ET
In recent times, the Trump administration sees the sweet state of U.S. economic expansion as of early-July 2018. The latest CNBC All-America Economic Survey
2019-03-27 11:28:00 Wednesday ET
OECD cuts the global economic growth forecast from 3.5% to 3.3% for the current fiscal year 2019-2020. The global economy suffers from economic protraction
2019-02-25 12:41:00 Monday ET
Chicago financial economist Raghuram Rajan views communities as the third pillar of liberal democracy in addition to open markets and states. Rajan suggests