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Elon Musk and his Tesla will have to pay $ 40 million for tweeting news

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Elon Musk and his Tesla will have to pay $ 40 million for tweeting news
October 02
09:00 2018

The SEC Commission has sued Elon Musk, Tesla chief executive. The billionaire is accused of fraud. The reason was his tweets about the buyout of the company, which he made public in August this year.

These statements turned out to be false and misled the public. The Commission believes that Mr. Musk neither discussed the terms of the purchase nor arranged the transaction that resulted in suffering losses by investors. The commission asked the court to sanction Tesla’s head with a fine and prohibit holding the leadership position in the companies that have shares on the stock exchange.

Elon Musk in turn considered the actions of the SEC commission “disappointing and unreasonable” ones. “I am always honest and act solely for the sake of truth and in investors’ interests. Facts will prove my intentions, ”- commented E.Musk.

We recall that at the end of the summer the businessman tweeted that he intended to buy out the shares of the company he headed for $ 420 per share. He emphasized that there was funding for that. But he retracted his statement 2.5 weeks later.

By law, companies and their managers cannot give false information about such events. If it turned out that Mr. Musk had made these statements in order to provoke a rise in Tesla shares, he would have had a hard time.

The founder of Tesla only got a slap on the wrist for that. He and the company were obliged to pay a fine of $ 20 million. Elon Musk will not head the Board of Directors during three years but remain the post of CEO. Also, two independent directors will start working for the company.

SEC representative Stephanie Avakian explained: “Such remedial measures are designed to strengthen corporate governance and control over Tesla.”

 

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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