Senator Elizabeth Warren (D-MA) called the Securities and Exchange Commission (SEC) to investigate Tesla CEO Elon Musk’s tweets.
“Since Elon Musk took over Twitter, I’m concerned @Tesla’s board has failed to manage conflicts of interest from his role as CEO of Tesla & Twitter. Tesla’s board has a legal obligation to serve its shareholders. I’m urging @SECGov to investigate,” Warren said.
The Massachusetts Democrat claims that Musk’s social media activity could be violating securities laws and potentially misleading investors.
In a series of tweets over the past few months, Elon Musk has been known to make bold claims about Tesla’s future performance, product releases, and financial outlook. Senator Warren contends that these tweets may have caused Tesla stock price fluctuations, leading to concerns about potential market manipulation.
Q2 Shareholder Update https://t.co/rd0ILdpzRL
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Highlights
In Q2, we produced a record number of vehicles, thanks to ongoing ramps of our new factories & strong performance of Shanghai & Fremont.
Cybertruck equipment installation at Giga Texas is in progress, with deliveries…
— Tesla (@Tesla) July 19, 2023
Warren’s request to the SEC comes after Musk’s recent tweet about Tesla’s production targets for the upcoming quarter, which the senator believes could be misleading to investors. While Musk has been known for his candid and sometimes controversial tweets, Warren argues that such messages from a prominent CEO could have significant implications for shareholders.
The SEC has yet to respond to Senator Warren’s request, but the agency has previously taken action against Musk for his social media activity. In 2018, the SEC accused Musk of securities fraud after he tweeted about potentially taking Tesla private at $420 per share, causing the company’s stock price to surge. Musk settled the charges with the SEC and agreed to step down as Tesla’s chairman for at least three years.
In response to Warren’s call for an investigation, Tesla spokesperson Emily Telson stated that the company stands by its CEO and his communications with the public. Telson emphasized that Musk’s tweets have always complied with securities regulations.
As the debate over social media and its impact on financial markets continues, Senator Warren’s request to the SEC highlights the responsibilities of high-profile CEOs and their use of Twitter. Whether the SEC will launch a formal investigation into Elon Musk’s tweets remains to be seen. Still, the issue raises questions about the fine line between free speech and potential securities violations in social media.
