An SEC investigation into Tesla CEO Elon Musk’s tweets about going private and having “funding secured” won’t be speedy and could last for months.
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FOX Business’s Charlie Gasparino reported exclusively on Wednesday that the SEC has sent subpoenas to the company related to the matter.
“There will be… first document production, which if the new story about subpoenas is correct will start fairly shortly and then there will be interviews. Then the amassing of that data will have to be analyzed and then a recommendation has to made of the five commissioners. So we are looking at months, not days or weeks,” Former Security and Exchange Commission (SEC) Chairman Harvey Pitt told FOX Business’ Stuart Varney on Thursday.
Musk stunned investors last week with a tweet about taking the electric car maker private at $420 per share. While his delivery method created a firestorm, that is not the issue regulators will hone in on.
“It’s potentially troublesome, but it’s not illegal and my view is it’s not the medium here,” said Pitt who notes his “funding secured” comments as troublesome. “It was his message. The message and the timing and the manner in which he delivered it were all highly problematic” Pitt added.
After the bombshell tweets, Tesla shares soared, were then halted by the Nasdaq and resumed trading to end the session 11 percent higher. The jump squeezed short sellers, who Musk has often sparred with, costing them more than $1 billion, according to S3 Partners.
On Thursday Gasparino reported that Tesla’s legal team is bracing for billions in potential liability tied to those losses as investors mull lawsuits against the company.