Elizabeth Warren is once again urging the Securities and Exchange Commission (SEC) to investigate Elon Musk over governance issues. This time, Musk’s governance of Tesla and X has come into question.
Warren wrote a six-page letter to the agency this week noting recent evidence of a lack of independence between Tesla and X. (via CNBC)
Since Elon Musk took over Twitter, I’m concerned @Tesla's board has failed to manage conflicts of interest from his role as CEO of Tesla & Twitter.
Tesla's board has a legal obligation to serve its shareholders. I'm urging @SECGov to investigate.https://t.co/YWaN9GcdDg
— Elizabeth Warren (@SenWarren) July 17, 2023
In her letter, Warren noted that:
Tesla’s Board lacks independence from Mr. Musk, who uses his control over the Board for his own benefit rather than in the best interest of Tesla’s shareholders.
She also raised concerns over resources, including:
Mr. Musk’s recent public statements and actions have raised fresh concerns about conflicts of interest, the redirection of Tesla’s resources to Mr. Musk’s private companies.
Elon Musk took to X in response:
Senator Karen’s main economic & tax advisor is SBF’s Dad.
I suspect some of this is coming from him. https://t.co/RZAKyEdFYS
— Elon Musk (@elonmusk) March 21, 2024
The SEC and Musk have a long history of clashes. Currently, the commission is investigating if Musk or anyone else committed securities fraud when Musk started buying Twitter stock ahead of his leveraged buyout. However, the agency has not released any other details on the probe.
In addition, the SEC confirmed to CNBC that the agency will respond directly to the Member of Congress. So, we should not expect any press or public comments unless the SEC starts a probe.
This is also not the first time Warren has gone after Musk. In 2021 Warren spent thousands of dollars on Facebook ads attacking Musk for “freeloading off everyone else” and not paying his taxes. Two years later and Warren called upon the SEC to investigate Tesla and its board of directors regarding potential violations of securities laws after Elon Musk’s takeover of Twitter.
