On July 17, Senator Elizabeth Warren called on the US Securities and Exchange Commission (SEC) to launch investigations into two companies led by Elon Musk, namely Tesla and Twitter, due to potential legal and ethical issues. .
Warren began by reiterating concerns he sent to Tesla in December 2022, all of which pertain to Musk’s dual leadership roles at Tesla and Twitter.
Warren alleged that, following Musk’s acquisition of Twitter, he possibly misused Tesla resources by transferring more than 50 Tesla employees to Twitter. Throughout his letter to the SEC, he suggested that the employee transfers may have involved costs that are relevant to investors and said the action could be a violation of state and federal law.
He also suggested that conflicts of interest could arise around the promotion. Musk could possibly boost Tesla in the Twitter algorithms or provide Tesla with free publicity. Alternatively, Twitter could accept ads from competing vehicle companies, earning immediate revenue at a cost to Tesla investors, Warren said.
Warren also noted that Tesla investors wrote an open letter criticizing Musk’s focus on non-Tesla companies and demanding a leadership succession plan. He added that Musk’s recent hiring of Linda Yaccarino as Twitter CEO does not eliminate any conflicts of interest due to her continued role as Twitter CTO.
The senator further noted that Musk has appointed friends and family to Tesla board seats and noted other signs that the board generally lacks independence.
She named several areas of securities law under which the SEC could potentially begin an investigation, most of which concern Tesla’s failure to disclose past issues.
Musk, Warren are focused on crypto
Tesla is a Bitcoin investor and owns 10,725 BTC ($321.6 million), according to some reports. The firm also accepts Dogecoin (DOGE) as payment for some merchandise.
Musk had also suggested integrating Dogecoin with Twitter before taking over the company, a proposal that has so far only resulted in a change to the company logo.
Warren, meanwhile, is known for her anti-crypto stances. She has criticized the use of cryptocurrency in sanctions evasion and drug trafficking and has called for investigations into Binance and other companies. She has also voiced her direct opposition to cryptocurrency, infamously stating that she is “building an anti-crypto army.”
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