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Comment by Cshelton | Hacker News Reader

I'm willing to bet the only thing that will come of this is a fine and a slap on the wrist.

Why? He's a huge liability to the company every day he remains with this hanging over his head. The SEC directly says he "violated, and unless restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act". Other than a fine, they're pushing for him to be barred from serving as an officer of a public company.

Because this is simply how SEC politics work. It rarely goes that far, and it's like 99% a fine. They don't actually have That much power beyond that.

Well it also rarely goes to filing a lawsuit against the CEO... So I guess who knows, but if I was on the board I'd be reading the D&O insurance policy quite closely.

The SEC is not the judge. They can say whatever they want but they have to prove it in court.

Could Tesla move to another country and get listed there instead, so he could stay CEO?

Every fund that tracks the Nasdaq 100 (which includes $TSLA) would sell out of $TSLA when it was de-listed from Nasdaq (and therefore form the Nasdaq 100).

There's less financial wreckage created from replacing the CEO, IMO.

Not without facing a huge number of lawsuits. If your business plan requires being led by someone the SEC has banned you need a new business plan.

The only countries I could see Tesla moving to, if this plan is followed, are China, Russia, and North Korea. Obviously lawsuits would be the least of their problems if this occurred.

TRNC, San Marino, Svalbard, Transnistria, Monaco too.

...and irrepairable loss of investor trust

I don't believe so. I have been a Tesla owner and investor for a long time now. I know where Elon comes from, what missions and goals he has stated for years now, and what he is trying to accomplish.

I promise you, Elon legitimately thought there would be an opportunity to go private again. He's said he wanted to do so in the past, and even has said they never wanted to go public, but were left with no choice. I don't think any part of Elon was trying to commit fraud or security manipulation. He made a mistake, we all do. He said something that should not have been said at that given point of time. I'm sure he was excited. He even said he typed that tweet in the car after leaving SpaceX.

Should he be fined? That is up to the SEC. Will I and many other investor lose trust in what Elon's mission is? Absolutely not.

> I promise you, Elon legitimately thought there would be an opportunity to go private again.

That's cool and all. And that's probably why the DoJ case will fail (at least, I'm betting that the DoJ case will turn up nothing).

But this is the SEC: they only have to prove recklessness or negligence. That Musk was NEGLIGENT in his ability to properly vet the information before tweeting.

In particular:

> Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions.

https://www.scribd.com/document/389617063/United-States-Secu...

As a CEO, his responsibility is to report on the news of the company to his investors in a responsible manner. If Musk is negligent and/or reckless about the facts, then that is ALONE sufficient to have him removed from the position.

That's the thing about this SEC case. They do not have to prove scienter (criminal knowledge of wrongdoing) or malice. They only have to prove recklessness or negligence.

EDIT: Upon further review, paragraph 79 claims that Elon Musk has scienter of these events. So the SEC is in fact claiming that Elon Musk deliberately knew that making these statements were wrong, and did it anyway. This is above and beyond "reckless" or "negligent" !!

I find it hilarious that intent is under doubt. Somehow people have forgotten "short burn off the century". If shorts squeeze did happen, there would be cheering everywhere.

Personally, I don't doubt intent. But "Beyond a reasonable doubt", as well as the necessity for a "malice" in the DoJ's case makes me think that... the DoJ has way too hard of a case to pull together.

I mean, I might be proven wrong. But... showing off a couple of rage tweets in court to prove malice doesn't seem plausible to me. Would a Jury of 12 (and remember: all 12 have to agree) be convinced over a couple of "who likes short-shorts" tweets?

If a SINGLE jury member, 1 out of the 12, disagrees, then you get a hung case aka a mistrial. As per the rules of the DoJ investigation anyway. That's why I don't think the DoJ will go anywhere, because proof and evidence is at a way harder standard in a criminal case.

Au contraire - I think what's more fascinating about this is Musk's personal branding, which apologists like you have bought into. Just hear me out.

I mean, insiders and the SEC clearly know he didn't have an offer to go private on the table when he announced. With Musk's pattern of behavior on twitter recently (pedophile name-calling, weed gifs, etc.) it's much more likely that he was reacting to the short sellers that got under his skin, rather than making a calm, confident announcement of acquisition as you say. When Musk's team finally scrambled together an offer after the announcement, Musk rejected it outright because he was paranoid about Volkswagen [1], a manufacturer that would have helped solve Tesla's scaling problems.

There's always going to be short sellers. There are not always going to be CEOs who let them get under their skin or let hubris in the way of business.

[1] http://archive.is/cuuor

>clearly know

This is clearly your opinion..

Read the linked WSJ article. He tweeted before there was even an offer on the table.

This is the Musk apologizing I'm talking about.

> I promise you, Elon legitimately thought there would be an opportunity to go private again.

According to the hard facts the SEC is presenting this is patently false, there was absolutely no reason for Musk to "legitimately" think that.

> even has said they never wanted to go public, but were left with no choice.

Also just not even close to true. Elon would have been canned and Tesla would have been bankrupt by now if they didn't go public. If by "left with no choice" means "structured the company so that only a public IPO could sustain it and allow for the path he wanted" then I guess you're right?

See: https://www.bloomberg.com/view/articles/2018-08-17/elon-musk...

That's not going to happen unless the sales stop growing. As things are right now, they still can't make their vehicles fast enough. Demand is outstripping supply.

Until that changes, investors will overlook a lot.

Because he made short sellers look like idiots? I think not. I just bought more.

I am an investor, and I have not lost trust (temporarily degraded perhaps, but certainly not irreparably!).

I also take the long view; Elon is instrumental to the long-term outcome for Tesla, our species, and our planet.

You sound a bit like Doctor Strange here. Sure he's made some bold moves intended to steer us toward a better future, but the fate of civilization does not rest on his shoulders.

Unless we make him President. Don't make him President.

President of what? The United States? He was born in South Africa so that's not going to happen.

The fate of civilization depends on the individuals that share his trait - the trait to desire most strongly a bountiful and amazing future - knowing that they will be able to successfully build companies such as Tesla and SpaceX without ruthless persecution by the government, the media, and short sellers.

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