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Musk & Tesla Accept $20M Fine from SEC; James Murdoch Floated to Replace CEO



by Steve Jurvetson

Elon Musk has had a tough year, to put it lightly. Things got real very at lightning speed when the Tesla founder got sued by the Securities and Exchange Commission right as the nation’s attention was on a jam-packed week of Washington politics and theater. The silliest thing about Musk’s newest and maybe most consequential problems is that it all came out of a stupid cannabis joke.

Musk’s joke just cost him and his company $20 million each, and he also has to step down as chairman of the board for three years, The New York Post reports regarding his settlement with the SEC. He still does get to stay on as an executive chief of Tesla though, on the stipulations that he bring in two independent directors and allow Tesla Inc. to monitor the communications he has among investors.

Musk had to settle after earlier this summer, he speculated on Twitter about taking the company private and said that there could be a $420-a-share takeover price for Tesla Inc. His tweets panicked some in the stock market, who would never have thought a company’s chairman would suggest such a thing jokingly. Musk was indeed not being serious though, making reference to a number that’s a part of cannabis folklore, 420.

“Am considering taking Tesla private at $420. Funding secured,” the now-infamous tweet said to the world, which caused shares to increase by $16 in just five minutes. His tweet not only shook up the markets but panicked executives at the company who didn’t know what was going on and if the suggestions in the tweet were real or a joke.

Musk told the SEC that the tweet was a joke, and he had reasons that plenty of other men may understand, though the SEC wasn’t so understanding. He was just trying to show off to his girlfriend at the time by making the juvenile joke. Although he admitted to the joke and settled with the SEC, he did not admit nor deny that he committed fraud by using a tweet that was meant to trick investors.

Last weekend’s settlement wasn’t the only time recently when Musk sparked a cannabis-related controversy. His antics on Joe Rogan’s podcast recently senta Tesla stock to its lowest price in five months, although there were other major causes, like a staff shakeup at the top. This controversy, on the podcast, arose out of Musk smoking some of Rogan’s cannabis during the show after Rogan handed it to Musk. While legal in California where the show was taped, some investors saw Musk’s toking as more signs that he’s acting erratically and not seriously. Others decried Musk for openly doing something that would cause his own employees at Tesla to be fired because of the company’s drug policies. He also didn’t help himself on the show when he sounded incoherent at times, at one point saying “I’m not a business magnate. I’m a business magnet.”

By: Christina Bromley

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