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  • William Maley
    William Maley

    Rumorpile: Musk Could Have Settled With SEC, But Backed Out At the Last Minute

      Does someone want to tell Elon Musk that the end goal isn't to make the situation worse?

    Late Thursday afternoon saw a massive bombshell dropped; the SEC sued Elon Musk over securities fraud over his August tweet that he was considering taking Tesla private and having the "Funding secured." But a new report from CNBC said there was a possible settlement between the two where Musk would not have to admit guilt. However, Musk pulled the plug on the deal at the last minute.

    According to sources, this is what the proposed deal looked like,

    • Tesla and Musk would had to pay a fine
    • Musk would not have to admit guilt or deny culpability
    • Barred Musk as being the chairman for two years
    • Require Tesla to find two new independent directors

    However, Musk refused this deal "because he felt that by settling he would not be truthful to himself, and he wouldn't have been able to live with the idea that he agreed to accept a settlement and any blemish associated with that, the sources said." 

    This move puts Tesla and Musk in a very difficult spot. The company's stock fell 13.9 percent on Friday - the worst since November 2013. There are also questions as to whether or not Elon Musk will stay on as CEO or if this mess will force him to leave. 

    Choosing to fight the SEC means it could take years for an outcome to be reached according to Toni Sacconaghi, an analyst with Bernstein Research.

    "In the absence of a settlement, the mere possibility that Musk could be removed as CEO (or entirely from Telsa) is likely to cast an overhang on the stock, and make it extremely difficult for the company to raise capital (either private or public)," Sacconaghi said.

    What will be Tesla's defense to the SEC's charge? The Wall Street Journal learned from a source that Musk believed "he had a verbal agreement in place with Saudi Arabia’s sovereign-wealth fund to help finance a plan to take the auto maker private." Musk believes that the SEC isn't "taking into account that Middle Eastern businesses routinely operate using verbal agreements in principle."

    Source: CNBC, Wall Street Journal (Subscription Required)



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    Idiot, IDiot, IDIot, IDIOt, IDIOT

    This guy is so full of himself and another Narcissist that he truly believes his own lie that he had a verbal agreement with SASWF. What a moron and even more of a reason to now remove him as CEO / Chairman and move the company forward with some sound business leadership.

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    That is the problem with deeply arrogant men (especially).  Only a stint in a correctional facility will actually force some humility down his throat.  Yes he should be ousted from Tesla, just for being stupid and excessively arrogant and self-important.

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