Elon Musk opened up in a new interview yesterday about the SEC lawsuit regarding his attempt to take Tesla privately back in 2018 and his infamous “finance-secured” announcement.
Tesla’s CEO now claims that funding was actually secured and that he was forced to reconcile with the SEC because the company’s banks told him he would not be able to secure additional funding if he continued to fight against the trial.
The whole situation stems from the fact that the SEC filed a lawsuit against Musk because of his infamous “finance-assured” comment regarding his failed attempt to take Tesla privately back in 2018.
Back in 2018, Musk briefly considered trying to bring Tesla private and revealed it to investors through a simple tweet.
The Security and Exchange Commission (SEC) ruled that Musk was exaggerating and misleading shareholders when he said the funding was “secured” in the tweet:
Musk went on a campaign against the SEC, calling them names and claiming that they worked for people who short-circuited the electric car manufacturer. But in the end, Tesla and Musk ended up settling with the SEC.
As part of the settlement, Musk agreed to resign from his role as chairman of the board, and Tesla and Musk each had to pay $ 20 million in fines.
The CEO probably did not want Tesla to pay for its problem with the SEC. Although he could not directly pay for Tesla’s portion of the fine, he decided to buy shares for $ 20 million from Tesla. In that way, he ended up indirectly paying for Tesla’s fine – even though he also ended up with ~ 71,000 additional Tesla shares in the process.
As we have previously reported, Musk actually ended up making money on the settlement due to Tesla’s stock price increase.
Another part of the settlement was that Musk and Tesla should agree that the former would have its tweets reviewed by the latter’s legal department if they are material to the company. Despite the settlement, Musk did not change his use of his popular Twitter account with over 80 million followers, and he remains defiant when it comes to the SEC.
Although this happened four years ago, it comes to light because Musk has been trying to get the settlement changed as he believes the SEC has abused the Twitter police part of the settlement.
In February, Alex Spiro, a lawyer for Musk, sent a letter to the court asking an audience to discuss what he described as the SEC’s “harassment” of Tesla and Musk. He also claims that the SEC has not yet distributed the $ 40 million settlement money to shareholders.
The SEC quickly dismissed the allegations of harassment, arguing that a plan to distribute the money would be presented to the court next month, and the delay is due to the complexity.
The court ended up rejecting Musk’s request, but his lawyers later filed a new lawsuit in court seeking to revoke the settlement and remove the SEC’s Twitter police from Musk.
In the proposal, Musk argued through his lawyers that he never lied to Tesla’s shareholders, and he decided to take the settlement for “Tesla’s immediate survival” when he was told that the ongoing battle with the SEC could prevent Tesla from raising money, and that Tesla’s largest shareholders could walk away.
However, in the application, they do not go into detail about how the funding was actually secured. This seems significant to both the SEC and the public at large, especially in light of his recent attempt at a hostile takeover of Twitter.
Now in a new interview yesterday, Musk elaborated on the situation again, insisting that he never lied to investors and that “financing was actually secured”:
The funding was actually secured. I have to say I have no respect for the SEC in that situation. I mean not to blame everyone at the SEC, but certainly the San Francisco office. The SEC knew the funding was secured. They nonetheless pursued an active public inquiry.
Again, he did not go into detail on how the funding was secured. At the time, they were rumors of potential talks that Saudi Arabia and Volkswagen were potentially part of the deal, but it was never confirmed to be more than very early talks.
But in the new interview, Musk also insists that the SEC knew the funding was “secured” and that Tesla was pressured by its banking partners to settle. He described the situation as “like having a gun to your child’s head”, and the SEC is “illegally” pushing the deal.
The SEC has not yet responded to the new comments.
These new revelations come as Musk tries to take another public company privately: Twitter. However, his financial situation has improved a lot over the last four years and he could easily secure the money to meet his $ 41 billion offer. Although he may have to sell some more Tesla shares.
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