Sen. Elizabeth Warren, a Democrat from Massachusetts, wrote to the Securities and Exchange Commission requesting that it look into Tesla and its board of directors for any potential “conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders” associated with CEO Elon Musk’s takeover of Twitter.
The Tesla board’s “apparent lack of independence” from Musk, along with “inaction and incomplete disclosures,” according to Warren’s letter to SEC Chair Gary Gensler on Monday, “raise questions about possible violations of securities laws and exchange rules which fall under SEC’s jurisdiction.”
The nine-page letter, which was first made public by CNBC, reiterates issues Warren had previously expressed in a letter to Tesla Chair Robyn Denholm in December 2022, following Musk’s $44 billion acquisition of Twitter. In order to pay off the $13 billion in debt associated with the take-private agreement, Musk reportedly sold shares of Tesla for billions of dollars.
The Office of Public Affairs at the SEC responded through a spokeswoman that Gensler “will respond to Members of Congress directly.”
After the acquisition was finalized, Musk took over as CEO of Twitter and immediately made significant modifications to the social network. He also fired more than three-quarters of the company’s employees and hired teams of staffers from Tesla and SpaceX to help him.
Warren claimed, citing CNBC’s reporting on the subject, that posting tweets from Tesla employees may have constituted “possible violations of state and federal labor law,” and that Tesla’s board had not properly informed shareholders about the ways that the two businesses have collaborated or may collaborate.
Linda Yaccarino, who formerly oversaw worldwide advertising for Comcast’s NBCUniversal was recently selected by Musk to the position of Twitter CEO. Hope was sparked by her employment that Twitter’s struggling advertising division would soon turn things around and that Musk would devote his attention back to Tesla and SpaceX.
Musk said early on Saturday that Twitter’s cash flow is still negative despite a 50% reduction in ad revenue and “heavy debt.” Wednesday of this week is when Tesla is expected to release its second-quarter financial results after the bell.
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