Twitter boss Elon Musk has been warned by a US regulator that he is “not above the law” after he defied an order to stop tweeting about Tesla’s car business. The Securities and Exchange Commission (SEC) said Mr. Musk violated a settlement reached last year over claims he misled investors. Mr. Musk, who is also Tesla’s chief executive, has until March 11 to explain why he should not be held in contempt of court. (Also Read: Elon Musk sells nearly $4 billion of Tesla stock)
Who is Elon Musk?
Elon Musk is the founder, CEO, and CTO of SpaceX, the co-founder of Tesla Motors, and the chairman of SolarCity. He is also the founder of The Boring Company, a tunnel construction company.
Musk was born in Pretoria, South Africa, the son of Maye (née Haldeman), a model and dietitian from Canada, and Errol Musk, a South African electromechanical engineer, pilot, and sailor. He has a younger brother, Kimbal (born 1972), and a younger sister, Tosca (born 1974). His maternal grandmother was British, and he also has Pennsylvania Dutch ancestry. After his parents divorced in 1980, when he was nine years old, he lived with his father in Pretoria.
Musk attended the University of Pretoria for five months before moving to Canada at age 17 to attend Queen’s University. He transferred to the University of Pennsylvania two years later, where he received dual bachelor’s degrees in economics and physics. He moved to California in 1995 to attend Stanford University but decided instead to pursue a business career, co-founding the web software company Zip2 with his brother Kimbal. The start-up was acquired by Compaq for $307 million in 1999. Musk co-founded the online bank X.com that same year, which merged with Confinity in 2000 to form the company PayPal and was subsequently bought by eBay in 2002 for $1.5 billion. In 2002, Musk founded SpaceX as another huge project.
What is Twitter?
Twitter is a social networking site where users can share short updates of 140 characters or less. These updates, called “tweets,” can be posted via the Twitter website, through text messaging, or with a variety of third-party applications. Twitter has become one of the most popular social networking sites on the web, with over 250 million active users and growing.
What did Elon Musk do?
Elon Musk, the boss of electric carmaker Tesla and aerospace company SpaceX, has been warned by a US regulator not to flout the law on social media.
The Securities and Exchange Commission (SEC) said it was “concerned” about Mr. Musk’s use of Twitter.
In a statement, it said that public companies must make sure that their communications “are not false or misleading and do not lead to securities law violations.”
The SEC’s intervention comes after Mr. Musk tweeted last week that he was considering taking Tesla private at $420 a share.
He also said he had “funding secured” for the deal, which would value the company at more than $70 billion (£53 billion).
How did the US regulator react?
Following Elon Musk’s now-famous tweet claiming that he had “funding secured,” the US regulator has issued a warning to him, stating that he is “not above the law.”
In response to Musk’s statement, the Securities and Exchange Commission (SEC) has opened an inquiry into the matter. In the tweet, Musk stated that he had secured funds to take Tesla private at a price of $420 per share. According to news reports, the SEC is looking into Musk’s statements to see if he tried to trick investors.
Musk has been the target of criticism from authorities in the past, so this is not the first time it has happened. After making false claims about taking Tesla private in 2018, he was charged with fraud by the Securities and Exchange Commission (SEC). The lawsuit was resolved amicably, and Musk agreed to pay a fine of twenty million dollars and step aside as chairman of Tesla for a period of three years.
It is currently unknown what kind of action, if any, the Securities and Exchange Commission (SEC) will take against Musk this time around. On the other hand, the fact that they cautioned him that he is “not above the law” indicates that they are taking this problem quite seriously.
What could happen to Elon Musk as a result?
If Elon Musk is found to have violated SEC rules, he could be fined, banned from serving as an executive at a public company, or even jailed.
Conclusion
After Elon Musk, CEO of Twitter, posted about taking Tesla private, a US regulator issued a warning to him that he is “not above the law,” saying that he is subject to the same rules as everyone else. According to the Securities and Exchange Commission (SEC), Mr. Musk’s tweets contained “false and misleading” information. In addition, it stated that, contrary to his assertions, he did not have funds secured for the sale. If Mr. Musk is found guilty of fraud, he might have to step down as chairman of Tesla. (Also Read: Russia is withdrawing its troops from Kherson.)
