It’s not enough that the U.S. Securities and Exchange Commission’s attempt to hold Elon Mask accountable for fraud the agency alleged he committed three years ago did little to change how he runs Tesla Inc. The company’s chief executive officer just can’t resist rubbing it in the regulator’s face.
Exhibit 69 (or was it 420?): On Nov. 30, Tesla put a new product called Cyber whistle on its website just in time for stocking-stuffer shoppers. The $50 stainless-steel instrument, shaped like the pickup Musk showed in 2019 (and has yet to produce), sold out almost immediately after the CEO tweeted a link to his more than 60 million followers. “Blow the whistle on Tesla!” he wrote.
Close watchers of Musk’s feed immediately predicted that a real Tesla whistleblower would emerge in a matter of days, and they were right. Reuters reported a week later that the SEC was investigating concerns a former engineer raised in 2019 about solar panel defects and fire risks—and whether Tesla had disclosed them properly to its shareholders and customers. The ex-employee sued the company in November 2020, claiming wrongful termination.
It strains credulity that the two events could be explained away as coincidence, especially since this isn’t the first time Musk has promoted a satirical product by tweeting taunts at the SEC. In July 2020, after Tesla had surpassed ExxonMobil Corp. and Toyota Motor Corp. in market value and posted vehicle-delivery figures that sent the stock soaring further, the CEO declared the company would “make fabulous short shorts in radiant red satin with gold trim,” needling the short sellers who had been betting against the company.
“Will send some to the Short seller Enrichment Commission to comfort them through these difficult times,” Musk wrote. He then tweeted a profane on the agency’s initials—“SEC, three letters acronym, middle word is Elon’s”—that made a fund manager who regularly engages with him anxious. “Dangerous,” the Tesla shareholder tweeted, to which Musk replied: “But so satisfying.”
It’s difficult to tell how big a deal the SEC’s investigation into Tesla’s solar safety risks will ultimately be. What may be a more serious concern is Musk’s penchant for poking the bear in Washington that’s tried before to bring him down.
September 2018 after he claimed to have the “funding secured” to take Tesla private at $420 a share. According to the agency, Musk picked the price in part because of the number’s significance in marijuana culture and thought his then-girlfriend would find it funny.
Tesla shares have since soared, but the company isn’t out of the woods with regard to the SEC. Two years ago this month, on the same day it closed an investigation into Model 3 production projections, the agency sent a subpoena seeking information about “certain financial data and contracts including Tesla’s regular financing arrangements.” The company hasn’t elaborated on the matter since it disclosed receiving the summons early last year, but it keeps mentioning the issue in quarterly filings.
One area of Tesla business that could be ripe for the SEC to probe are the features it has branded Autopilot and Full Self-Driving, or FSD.
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