Sen. Elizabeth Warren, D-Mass., has once again urged the U.S. Securities and Exchange Commission to investigate Tesla, CEO Elon Musk and the company’s board of directors over what she called “possible misappropriation of Tesla’s resources and conflicts of interest arising from Double Musk’s role at Tesla and X – name changed from Twitter.”
Warren, who serves on the Senate Banking and Armed Services Committees, sent a similar request to the SEC last July and a letter to Tesla board chair Robyn Denholm expressing similar concerns in the past.
IN six-page letter on March 21, Warren raised new concerns with the federal agency, writing that the latest evidence suggests that “Tesla’s Board lacks independence from Mr. Musk, who uses his control of the Board for his own profit somewhat than in the best interests of Tesla shareholders.”
Warren’s letter references a Delaware Chancery court ruling from January this year in which Judge Kathaleen McCormick found that Elon Musk controlled Tesla and its board “breached its fiduciary duties by awarding Musk an ‘unfathomable’ $55 equity compensation plan,” $8 billion. “
Warren noted that Tesla’s stock price has dropped about 30% since the starting of the yr.
“Mr. Musk’s recent public statements and actions have raised new concerns about conflicts of interest and the diversion of Tesla’s resources to Mr. Musk’s private companies,” she wrote, referring to Musk’s demand for 25% of Tesla’s voting power, his desire to move Tesla’s headquarters to Texas and, amongst other things, threats to develop AI products elsewhere if it doesn’t gain such control.
Tesla’s vice chairman of investor relations Martin Viecha and vice chairman of public policy and business development Rohan Patel didn’t respond to requests for comment. Tesla doesn’t maintain a conventional public relations team in North America.
Musk, who is the CEO of Tesla and defense contractor SpaceX, in addition to the chief technology officer and owner of X and the founding father of xAI, Neuralink and The Boring Co., posted comments about Warren on his social media platform in response to the senator’s letter.
Musk said: “Senator Karen’s chief economic and tax advisor is SBF’s dad. I suspect some of this information comes from him.” Musk has called Warren “Senator Karen” in previous posts.
Musk was referring to Sam Bankman-Fried, or SBF, who was convicted in 2023 of seven criminal charges brought against him in reference to the 2022 collapse of his crypto firm FTX and sister hedge fund Alameda Research.
SBF’s father, Stanford lawyer Joseph Bankman, signed a letter supporting her proposed 2016 laws to simplify the U.S. tax code and reportedly advised her on the laws.
A spokesman for Warren’s office confirmed that Bankman was not involved.
An SEC spokesman told CNBC in an email Thursday that agency Chairman Gary Gensler “will respond directly to members of Congress” somewhat than through public or press statements.
Musk and the SEC have clashed quite a few times over the years. Federal financial regulators charged Musk with civil securities fraud after he tweeted in 2018 that he was considering stepping into a personal cope with Tesla for $420 a share and had “funds secured” to accomplish that. Musk’s tweets halted trading in Tesla shares and caused the company’s stock price to fluctuate for weeks.
The SEC is currently investigating whether Musk or anyone else committed securities fraud in 2022 after they began buying Twitter stock ahead of the company’s leveraged buyout. Musk was late in reporting required details about his initial investment in Twitter before taking the company private and renaming it X Corp.
Another investigation into Tesla and Musk would increase tensions between the agency and one in all the world’s richest men on paper.
On Thursday, Tesla shares were down a degree intraday at $172.82, but were trading barely higher after hours.
