Senator Elizabeth Warren, D-Massachusetts, sent a letter urging the US Securities and Exchange Commission to investigate tesla and its board of directors regarding potential «conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders» related to the CEO Elon MuskThe takeover of Twitter.
In the letter sent Monday to SEC Chairman Gary Gensler, Warren wrote that Tesla’s board of directors’ «apparent lack of independence» from Musk, combined with «inaction and incomplete disclosures, raises questions about possible violations of securities laws and trading rules that fall under SEC rules.» jurisdiction.»
The nine-page letter, first obtained by CNBC, reiterates concerns Warren had raised in a previous correspondence with Tesla Chairman Robyn Denholm in December 2022, after Musk led a Purchase of Twitter for 44,000 million dollars. The going-private deal included $13 billion in debt, and Musk reportedly sold billions of dollars worth of Tesla stock to finance the transaction.
A spokesman for the SEC’s Office of Public Affairs said Gensler «will respond directly to members of Congress.»
Musk named himself CEO of Twitter after the deal closed and quickly made sweeping changes to the social network, while cutting more than three-quarters of the company’s staff and authorizing equipment of Tesla and SpaceX employees to help you there.
Citing CNBC’s report on the matter, Warren wrote that taking Tesla employees to Twitter could have involved «potential violations of state and federal employment law,» and that Tesla’s board had failed to adequately inform shareholders about the actions. ways the two companies have worked together. Or they can work together.
In recent weeks, Musk has appointed Linda Yaccarino, who previously headed global publicity for from Comcast NBCUniversal, at role of Twitter CEO (NBCUniversal is the parent company of NBC News.) Hiring him raised hopes that Twitter’s beleaguered ad business would soon recover and Musk would refocus on Tesla and SpaceX.
Earlier Saturday, Musk admitted that Twitter’s cash flow still negative after a 50% decline in ad revenue and «big debt.» Tesla is scheduled to report its second-quarter earnings after the bell on Wednesday of this week.
In her letter to the SEC chairman, the senator said Yaccarino’s appointment still leaves Musk in charge of Twitter, where he is now chief technology officer and chief executive, and that the arrangement could create conflicts of interest.
Among these, he wrote that on Twitter, Musk could «decide to run the company to maximize much-needed revenue, even if that includes big deals for Tesla’s competitors and potential damage to Tesla.» Rather, he said Musk could choose to «run Twitter to benefit Tesla through favorable algorithms or free advertising.»
Musk and the SEC have already clashed repeatedly. Federal financial regulators accused Musk of civil securities fraud after he tweeted in 2018 that he was considering taking Tesla private for $420 a share and had «funding secured» to do so. The tweets triggered a halt in trading in Tesla shares and caused the company’s stock price to swing for weeks.
Musk and Tesla paid penalties and passed a revised consent decree to settle the charges in 2019, but Musk later moved to either terminate that agreement or modify it. In May 2023, a federal appeals court judge denied the Tesla CEO’s request to end the deal, which requires that any of his tweets containing material Tesla business information be reviewed and approved by a Tesla securities attorney. before Musk publishes them.
Tesla did not immediately respond to a request for comment.