Elon Musk to Relinquish Chairman Role and Pay Stiff Fine Following SEC Fraud Charges

Discussion in 'HardForum Tech News' started by Megalith, Sep 30, 2018.

  1. Megalith

    Megalith 24-bit/48kHz Staff Member

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    The SEC has settled charges with Tesla over CEO Elon Musk's “false and misleading” statements in a bid to take his company private: in the aftermath, Tesla and Musk will have to pay $20 million each. Musk will also have to step down as chairman of the board.

    The SEC's enforcement action brings to a conclusion a saga which began in early August, when Musk announced via Twitter that he had secured enough funding for a massive private buyout of Tesla. The SEC complaint alleged that in doing so, Musk issued "false and misleading" statements, and failed to properly notify regulators of material company events.
     
  2. lightsout

    lightsout Gawd

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    Wow, 20 million for a tweet.
     
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  3. haste.

    haste. [H]ard|Gawd

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    So they change his title. He'll lose the ability to officially bring motions forward (unless they of course make him vice chair and the chairman has to miss all the meetings). This all seems kinda silly for what it was all things considered.
     
  4. cdr_74_premium

    cdr_74_premium [H]ard|Gawd

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    One more for the "everyone is right, or wrong" folder:

    1) Elon is a douche.
    2) They do want him gone.
     
  5. haste.

    haste. [H]ard|Gawd

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    Remember when you're worth 20B, 20M is not quite as substantial as the average middle class person pictures it.
     
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  6. heatlesssun

    heatlesssun [H]ard as it Gets

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    A CEO making this kind of public statement is CLEARLY a market influence that was at best misleading. I think the SEC was warranted.
     
  7. Balkroth

    Balkroth Limp Gawd

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    I think this is right, but also don't want this to fubar spacex
     
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  8. Oldmodder

    Oldmodder Gawd

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    Its strange you can be worth 20 billion, when none of your companies make a profit as far as i know.
    I am pretty sure this is one of the ways the ruling 10 % screw the rest of us over.
     
  9. heatlesssun

    heatlesssun [H]ard as it Gets

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    Tesla's market cap is $45 billion and Musk owns 27% so that on paper is roughly $12 billion of his wealth.
     
  10. ryan_975

    ryan_975 [H]ardForum Junkie

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    There's a difference between what you're "worth" and what you have in your pocket. I'm sure most of his free cash quickly gets tied up in investments, so he probably doesn't have $20m to fork over without having to liquidate something. When your worth is tied up in the company affected by your actions, having to liquidate some of your holdings to pay a fine has the potential to snowball if not handled correctly. That $20m could easily cause a $200m hit to your worth.
     
  11. heatlesssun

    heatlesssun [H]ard as it Gets

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    An ultra rich person like Musk easily has 20 million in cash and a lot more. People like him need that kind of money for their lifestyles.
     
  12. Lith1um

    Lith1um 2[H]4U

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    Poor mans gets a set of bars to hold, rich man gets a fine and a slap on the rist. /Business as usual in the corporate states of USA
     
  13. theBrownLlama

    theBrownLlama Gawd

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    dude also needs to vet all Tesla related tweets as part of the settlement onwards.

    i think that hurt his ego more than this US20m
     
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  14. heatlesssun

    heatlesssun [H]ard as it Gets

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    Indeed. Look at 2008, no fat cat got more than fines. Unfortunately, while it may not be fair, putting people that that on trial only puts companies on trial and then the poor man looses his job.
     
  15. RealBeast

    RealBeast Gawd

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    Toking and tweeting don't mix. :(
     
  16. Oldmodder

    Oldmodder Gawd

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    And thats what i dont get, as far as i know tesla have never made a profit, but are supposed to do so in 2018.
    The 45 bilion are what rich people at least will cash in on if it work, and if it go sour thats what they will dump in the lap of regular people.

    Its these fantasy money that ruin the world.
    Sam here you parents could have build a house in the mid 70ties at the cost of 500.000 DKKr, and since then they might have spent 200.000 on running repairs and improvements.
    BUT ! today that house sell for 2.5 - 3.5 million DKkr,,,,,,, thats just wrong if you ask me, and the reason i would feel really stupid buying a used house.
     
  17. ryan_975

    ryan_975 [H]ardForum Junkie

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    But is it freely available for him to spend however he wants at the drop of a hat and not structured into some sort of growth plan? Will spending it on this fine not affect his ability to run his companies if they needed a cash infusion and couldn't get investors on board (if I recall, he's had to use his own money of several occasions to cover his companies' expenses)?
     
  18. Chunder

    Chunder Gawd

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    Elon deserved to be punished, and I think this punishment is too weak, but he's only being punished for attempting to screw over bigger fish in the corporate sea. Screwing over his workers, unions, and attacking rescue divers that called him out on his BS is fine, but trying to screw over corporate investors that make big bank off taxpayers money? That's when you take things too far! Now he's lost his chairmanship and will get replaced by someone more "friendly" (controlled) by investors.

    At least we (hopefully) won't be getting anymore of his BS public relations tweets anymore. Flint, Michigan is still waiting for that clean water he promised, and which could've been fixed years ago with just a fraction of the billions his companies steal from taxpayers in corporate subsidies.
     
  19. haste.

    haste. [H]ard|Gawd

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    Someone with 20B isn't going to not have 20M in either liquid or tax sheltered investments. I understand your point, anytime you liquidate investments there are many factors to consider, but again think of the percentage of net worth and how little 20M is... and 20M is never going to equate to 200M unless you are being hypothetical about feature gains. He may have to pay the nominal capital gains tax on performing investments (which if you have 20B you don't liquidate) but not 200M.
     
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  20. heatlesssun

    heatlesssun [H]ard as it Gets

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    I've development wealth management systems for rich and ultra rich like Musk and no doubt he has one or more these kinds of account with probably a few billion is assets in them. They are like 401k for rich people that provide investment and lines of credit. Unless Musk is a poor 20 billion dollar billionaire with no assets to invest he'd should be able to click on a few buttons and have 20 million in no time.
     
  21. travisty

    travisty Gawd

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    Let's be clear. Flint's water crisis was caused by the actions of the self imposed despot Republican Rick Snyder and his desire to make personal wealth by privitising the public owned water utility
     
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  22. haste.

    haste. [H]ard|Gawd

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    Yes it was. But at the same time you have to look at the market fluctuation from another persons tweet. Penalties should be fair and equally distributed notwithstanding what your role in the economy is.
     
  23. haste.

    haste. [H]ard|Gawd

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    And you clearly don't understand the situation. They don't want him gone. Regardless of his recent behavior he is a visionary and capital flows in due to that fact. Him being gone capsizes Tesla. No one on the board wants that. Your personal or political beliefs about his demeanor has nothing to do with why his companies are successful.
     
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  24. heatlesssun

    heatlesssun [H]ard as it Gets

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    Not exactly sure what your point is here. Being CEO of a major corporation, Musk has inside knowledge of Tesla and he owns 27% of it. What he tweeted about was wrong at a number of basic levels.
     
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  25. Wierdo

    Wierdo [H]ard|Gawd

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    I think this is the wise thing to do, it doesn't matter if he was gonna win this or not, draggining this further than it needs to would hurt the company regardless of outcome, so getting it out of the way is worth the cost.

    Better to swallow pride and just pay off the SEC cronies, it's a small price to pay in return for having more time to concentrate on the actual products, services and market disruption, that's where efforts are best spent for a CEO and his company.
     
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  26. ryan_975

    ryan_975 [H]ardForum Junkie

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    I'm being hypothetical about the market reaction to making a wrong move to cover the fine.

    Again, I'm not saying he doesn't have the cash, or can't get the cash. I'm saying that $20m isn't so small an amount that he doesn't have to stop and think about how he handles it it lest he cause more damage to his worth.
     
  27. Nanogrip

    Nanogrip Limp Gawd

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    Great time to buy him a couch now he'll lose some $$$
    nfa-king-elon-musk-model-three-needs-narr-gfx-frame-5861.jpg
     
  28. heatlesssun

    heatlesssun [H]ard as it Gets

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    I just have to disagree based on my banking experience in the area of high wealth management. This really should be nothing to a guy like Musk.
     
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  29. ryan_975

    ryan_975 [H]ardForum Junkie

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    The ultra rich don't get to be (and stay) ultra rich by not worrying about their money. I seriously doubt this is simply "nothing" to him and he's not going to give some thought about how best to cover it in the least impactful way possible.
     
  30. aokman

    aokman Gawd

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    You do realise he lives a pretty basic life right? Hell half the time he sleeps at the Tesla factory trying to resolve issues.
     
  31. heatlesssun

    heatlesssun [H]ard as it Gets

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    If a single 20 million dollar payment had a material impact on a guys with Musk's estimated wealth then he has far more serious problem than this incident. It really should be nothing to him otherwise he didn't care as much about money has you're saying he would have had to get to where he is.
     
  32. haste.

    haste. [H]ard|Gawd

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    I was trying to imply the tweeter of the united states of america has a similar impact on market condition...
     
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  33. heatlesssun

    heatlesssun [H]ard as it Gets

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    Doesn't he have $72 million dollars in real estate in LA?
     
  34. aokman

    aokman Gawd

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    Where do you people get this shit from... Tesla paid off a 465 mil government loan almost a decade early. None of thenother automakers have done the same and Tesla paid it back with interest.
     
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  35. sfsuphysics

    sfsuphysics I don't get it

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    Doesn't matter how substantial that is, it's still 20 million for making a really bad joke/comment about HIS business. One of the local stores I go to always talks about getting out of the business... has been doing so for the past 20 years or so, SEC isn't coming down hard on him... why? Because the 1%ers of this world that buy and sell things with only a perception of value had that perception of value change? Seriously something wrong.
     
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  36. hmz

    hmz 2[H]4U

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    Buffett said in his book he doesn't even have 1M in cash.

    20M is no joke amount. He may not have it.
     
  37. heatlesssun

    heatlesssun [H]ard as it Gets

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    I've seen accounts Buffet has had. He wasn't being particularly honest about that statement. 1M would less material impact on Buffet than $1000 for most.
     
  38. Comixbooks

    Comixbooks Ignore Me

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    Kim Kardashion makes like 20 million for 20 tweets.
     
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  39. cdr_74_premium

    cdr_74_premium [H]ard|Gawd

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    God, the wrath of Elon evangelists.

    I have no stakes. I want the guy to succeed, and I couldn't care less for EVs. To me, the more people disrupting markets, the better. There's absolutely no company that dialed down the douchebaggery when it became too confortable on its position.

    The problem is very simple: anyone but Elon would go to jail for anything like that. He will not. On the other hand, many interests were waiting for this moment to hamstring him out of what he's doing.

    Nobody is right, bring the popcorn.
     
  40. Verge

    Verge [H]ardness Supreme

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    justice department still investigating, and class action suite from Andrew Left is incoming. Not sure how they escape the class action since they all but admitted guilt here.