Could Musk just get this over with and pay back whomever lost money on this? It might be worth it for him to keep his position.
Edit: Ouch, I was only halfway through the article when I wrote this, but just noticed it was mentioned after.
Edit: Ouch, I was only halfway through the article when I wrote this, but just noticed it was mentioned after.
The settlement would have allowed Musk to remain CEO (in charge of the company). The board of directors is in charge of the CEO... and Musk would have been allowed to remain a director (just not the leader / chairman of the directors).
It was a super-lenient deal. I'm surprised Musk rejected it. True, the SEC was forcing Musk to take on 2-new board members, but Musk still has all of his old buddies on the board and would have likely remained in severe control of the company.
Note that as the biggest shareholder, Musk also has the ability to vote on who comes and goes on the board-of-directors, and thus he'd be able to effectively choose the chair as well !! So Musk ultimately would have STILL remained in charge of the company by a severe margin.
Musk is a big shareholder, is on the board of directors, AND is the CEO. He's the fox guarding the hen-house. Completely legal because companies can operate however they want... but SEC was trying to get the board of directors to at least look like they were somewhat independent. I mean, it probably would have been good for Tesla to get a more independent looking board...
https://www.dandodiary.com/2018/05/articles/regulatory-enfor... (SEC Public Company Enforcement Action Continue Steep Decline in First Half FY 2018)
> According to the report, the SEC filed 15 new enforcement actions against public companies and their subsidiaries in the first half of FY 2018, representing a 67 percent decline from the 45 enforcement actions the SEC filed in the first half of FY 2017. The number of enforcement actions filed in the first half of 2018 is significantly below the average of 29 enforcement actions filed per half year during the period FY 2010 through FY 2017, and below the median of 26 actions per half year filed during that same time period. The 15 enforcement actions filed against public companies and their subsidiaries in the first half of 2018 is the lowest half year filing total since the first half of FY 2013, when there were 12 filings.
> The current trend toward significantly reduced numbers of enforcement actions against public companies and their subsidiaries began in the second half of 2017. In the last half of the 2017 fiscal year, the SEC filed only 17 enforcement actions against public companies and their subsidiaries, compared to 45 actions filed in the first half of FY 2017.
Citigroup fraud cost investors hundred of millions of dollars. The SEC fined them $10 million. The SEC seems...less than effective in encouraging above board behavior by public companies. The fine is simply a cost of doing business.
https://www.sec.gov/news/press-release/2018-155-0 (Citigroup to Pay More Than $10 Million for Books and Records Violations and Inadequate Controls)
> The Securities and Exchange Commission today announced that Citigroup has agreed to pay $10.5 million in penalties to settle two enforcement actions involving its books and records, internal accounting controls, and trader supervision. The charges stem from $81 million of losses due to trader mismarking and unauthorized proprietary trading and $475 million of losses due to fraudulently-induced loans made by a Mexican subsidiary.
* Managing securities
* Being on the board of directors of a public company
* Being an executive of a public company
If your complaint is that people don't feel enough pain from their actions, blame the DOJ not the SEC.
> Occasionally, they send someone to jail to prove a point (Martin Shkreli)
To reiterate, Martin Shkreli was charged by the DOJ, not the SEC.
Your point about Shkreli is taken. I agree he committed a crime, I disagree it deserved prison time.
That makes sense to me given the current administration's overall stance towards regulation and enforcement. It's well in line with other enforcement agencies similarly being neutered under the current administration, and doesn't necessarily portend anything for the future (EDIT: Beyond the next two years, obviously).
The FBI famously chases down serial murderers, but they can't charge them with crimes either.
Most agencies have a police wing, but like most police, they refer your case to the DA who may charge you.
If Citi isn't charged here, then it's the DOJ at fault. They got the investigation report and chose not to act.