Elon Musk mocks SEC just days after Tesla settlement

Kenny Grant
October 6, 2018

A United States federal judge has demanded Elon Musk and the Securities and Exchange Commission (SEC) justify their settlement over the Tesla privatisation fiasco.

CNBC's Jim Cramer sees Elon Musk 's tweet poking fun at the Securities and Exchange Commission as erratic and deeply concerning, and he warns that this brand of continued obstinance could put Tesla (TSLA) on a bleak path.

A 1:16 p.m. California time, Mr. Musk's Twitter account tweeted, "Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work".

Musk has long waged a rhetorical war against shortsellers-investors who borrow shares of Tesla in order to profit if the price drops.

Additionally, Tesla's board must implement procedures for monitoring Musk's communications with investors, including on Twitter. "Tesla owners can refer someone to buy a Tesla & get any image they want laser etched in glass & sent to deep space for millions of years", Musk wrote on social media.

The settlement hit a bump in the road on Thursday after the federal judge on the case ordered Musk and the organisation to justify the agreement as "fair and reasonable".

The SEC accused Musk in its September 27 complaint of misleading investors with his infamous August 7 tweets about having the investor support and "funding secured" to take Tesla private.

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Over the weekend, Musk fired off another tweet that some took as a subtle jab at the regulators seeking to control him.

The stock's decline follows a series of tweets from CEO Elon Musk on Thursday night.

SEC charged the executive with securities fraud which led to the settlement in which Musk must pay $20 million and Tesla must also cough up a further $20 million.

However, Musk had been acting erratically for months even before the take-private tweet and the subsequent interviews with the Times and Rogan.

He then replied to it, writing: "The last several years have taught me that they are indeed reasonably maligned". The judge's request for additional evidence suggests Tesla may not be out of the woods just yet.

The SEC settlement still needs court approval.

Musk's raving isn't being well received by Tesla shareholders. The company held about 3.8 percent stake in Tesla as of the end of June, according to data compiled by Bloomberg.

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