Massachusetts Senator Elizabeth Warren has reportedly sent a letter to the U.S. Securities and Exchange Commission urging the regulatory body to investigate EV maker Tesla and its board of directors. According to CNBC, Warren claims there are possible “conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders” that all have to do with CEO Elon Musk’s $44 billion purchase of social media site Twitter.
Warren reportedly wrote that board members of the Austin, Texas-based automaker have an “apparent lack of independence” from Musk. She also asserted that “inaction and incomplete discourse, raise questions about possible violations of securities laws and exchange rules which fall under SEC’s jurisdiction.”
Warren reportedly wrote in the nine-page letter that Musk taking Tesla employees over to Twitter could have started “possible violation of state and federal labor law.” She also added that Tesla’s board had not informed shareholders correctly about the ways that the two companies have worked together, or may work together in the future.
Also in her letter, Warren said that Musk’s appointment of Linda Yaccarino as CEO still leaves him in charge of Twitter as CTO and executive chairman. She asserts that it is an arrangement that could lead to conflicts of interest.
She reportedly said that Musk could “decide to run the company to maximize badly-needed revenue, even if that includes great deals for Tesla’s competitors and potential injury to Tesla.” Basically, she is asserting that Twitter is losing so much advertising money right now that it could cut deals with automakers to advertise on the platform — hurting Tesla.
But, as there are two sides to every coin, there are also two sides to Warren’s argument. In the letter, CNBC says Musk could also choose to “run Twitter to benefit Tesla through favorable algorithms or free advertising.” Pretty much, whatever Elon chooses to do is bad for someone. It’s a tough situation he’s made for himself, isn’t it?
CNBC reports that the letter reiterates concerns Warren had previously raised in earlier correspondence to Tesla’s Chair Robyn Denhom back in December of 2022. That was right after Musk spent all that cash on Twitter. The deal also included $13 billion in debt, and Musk reportedly sold off billions in Tesla stock to finance the transaction.
This would certainly not be the first time Musk and the SEC have met as foes. He was reportedly charged with civil securities fraud following a 2018 tweet that he was considering taking Tesla private a5 $420 per share, and that he had the “funding secured” to do so. The tweet ended up causing a halt in Tesla trading and through the share price into a loop for weeks. He and the company reportedly paid fines and struck a consent decree making sure lawyers see tweets about Tesla business information before they are sent.
The emerald mine boy also appointed himself CEO of the site after closing the deal and quickly made some wild changes, while also cutting over 75 percent of the staff and authorizing teams of Tesla and SpaceX employees to help him on his new venture.