The settlement between Tesla and the US Securities and Exchange Commission stipulates that CEO Elon Musk is no longer free to tweet. But on Friday, Musk fired another twist-the-consequences tweet, called the SEC "shortseller anrichment committee."
Although the Music Twitter post seems to break the spirit of the latest deal, the SEC is largely powerless to stop Musks tirades until the settlement is approved by Federal Judge Alison Nathan in the Southern District of New York, which may take several weeks.
She has asked Tesla and the SEC to send a joint letter to explain why the settlement is " appropriate " before reviewing the case.
Sources of Knowledge of the Case ] Tell FOX Business SEC Regulators Are In Binding ̵
Elon Musk may be even more unsafe. The Tesla share fell on news about SEC actions against Tesla but stabilized on settlement news. However, fell 7 percent on Friday after his SEC mocking.
Musk has a lot of riding on Tesla stock and not just because his legacy is linked to the successful success of the electric car. If the stock price drops below $ 360, Tesla will be on the hook for close to $ 1 billio n in convertible bonds due to spring. The cash fixed the company's bleeding money every quarter and has to pay bondholders a billion dollars could drive it over the edge.
At this time, the SEC is unlikely to try to change the settlement, allowing Musk to remain at the root of the company as he went down as chairman. Within 45 days an independent chairman will replace Musk, which will be incompatible with re-election over the next three years. Musk and Tesla must also pay $ 20 million in penalty.
But it is possible that federal judges can terminate the agreement. If the winding up is down, the SEC would probably go against enforcement – it's unlikely they would be as easy in that case.
The wisest action line for Musk would be to put down the phone and cross your fingers. The deal will be approved.
At the moment, it appears that the only SEC regulator can shake their heads and roll their eyes.
Both Tesla and SEC did not respond to FOX Business's request for comments.