Tesla’s Elon Musk could be suspended as CEO in latest SEC scuffle, securities lawyers say

  • Securities lawyers say Elon Musk could face a suspension for tweets the SEC said were not properly vetted.
  • The ordeal with the agency also opens Tesla up to lawsuits.

Tesla CEO Elon Musk is facing pretty significant fines and a possible suspension as CEO for recent activity on Twitter that federal regulators said violated his Sept. 29 settlement with the Securities and Exchange Commission, securities lawyers say.

Musk and Tesla have until March 11 to respond to an order from a judge explaining why the court shouldn’t hold him in contempt after he tweeted about Tesla’s production forecasts for the Model 3, a midsize sedan. The agency said the CEO broke an agreement that requires him to vet any public comments that could affect investor decisions.

Former SEC attorneys and other securities lawyers said it looks like a clear violation. Neither Tesla nor the SEC responded to requests for comment.

Musk is still considered a first-time offender, in that he hasn’t been convicted of a crime, like Martha Stewart was in 2004, or indicted on criminal charges, like Elizabeth Holmes of Theranos was in 2018, and he isn’t quite yet a habitual or serial offender, said Elliot Lutzker, a former attorney in the SEC’s enforcement division. So it is unlikely the agency would seek an outright ban.

Source: CNBC

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