Despite reaching a settlement with the U.S. Securities and Exchange Commission in early October that, in part, sought to control his flow of communications, Tesla chief executive Elon Musk has continued to send tweets that violate the agreement, according to former SEC lawyer Teresa Goody.
Continue Reading Below
“He’s just showing that he has complete contempt for the SEC, for the rule of law,” she said on Tuesday during an interview with FOX Business’ Stuart Varney. “I think it’s going to come back and bite him.”
On Friday, Musk wrote on Twitter that his earlier tweet about taking the electric-car company private, which resulted in the launch of an SEC investigation and ultimately cost him $20 million in fines, was “worth it.” Musk reached a settlement, approved by a judge in mid-October, with the SEC after it argued he made intentionally “false and misleading” statements about privatization.
In the settlement, Musk and Tesla agreed to pay a collective fine of $20 million, while Musk was also required to step down as chairman of the company for three years (he retained the CEO title). Tesla was also forced to put into place controls to oversee Musk’s communication.
Days later, the eccentric billionaire mocked the SEC in a tweet, calling the agency the “Shortseller Enrichment Commission.”
But if Musk – a “repeat offender” – isn’t careful and continues to flout the settlement, he could risk drawing the ire of the SEC, Goody said.
“He’s violating the settlement agreement already, and so, the SEC could throw it out if they wanted to,” she said. “I mean I don’t think that’s going to happen at this point, but if he continues down the line that he’s on with the criminal investigations that are still ongoing, this is just going to lead to further penalties.”