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Musk’s SEC fine cost even less than a slap on the wrist

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Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, arrives at the SpaceX Hyperloop Pod Competition II in Hawthorne, California.
Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, arrives at the SpaceX Hyperloop Pod Competition II in Hawthorne, California.

Less than two months ago an unanticipated Tweet emerged from Elon Musk announcing that he was “considering taking Tesla private at $420. Funding secured.” It was an auspicious claim from the company’s chairman and CEO. Now, that Tweet has cost him $40 million.

On Sept. 27, 2018, The Securities and Exchange Commission (SEC) accused Musk of making “false and misleading” statements. A settlement soon followed, requiring Musk to leave his role as Tesla’s chairman. Musk and the company agreed to pay a $20 million fine each.

But relatively speaking, Musk got off with the equivalent of a parking ticket.

Following the Tweet, Tesla’s stock closed at $379.57, the 2018 high. The $20 million fine was less than 0.1% of Musk’s net worth. After the deal was announced shares of Tesla returned to pre-“420” levels.

With consequences like these, it’s no surprise Musk’s first post-fine Tweet showed no remorse.

 

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