Why Musk's tweets expose Tesla to potential shareholder and regulatory claims

The perils of disclosing sensitive information via social media

clock • 3 min read

Elon Musk has proved once again that 280 characters are more than enough to generate PR - and now, potentially legal - troubles for himself and Tesla.

On 7 August, Musk announced what would in effect be the largest-ever corporate buyout by stating on Twitter that he was "considering taking Tesla private at $420. Funding secured".  Within one week, these few characters spawned three separate shareholder suits against Musk and Tesla asserting securities law claims. The US Securities and Exchange Commission (SEC) also is reportedly investigating Musk and Tesla based on the content of the tweet. Whether funding for the proposed transaction was in fact "secured" is at the core of the shareholder lawsuits and, presumably, the SEC inquiry....

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

Trustpilot