Boston, MA – Senator Elizabeth Warren raised concerns with the Securities and Exchange Commission in a detailed letter dated March 21st, highlighting potential conflicts of interest at Tesla. The letter pointed to allegations that Tesla’s Board lacks independence from CEO Elon Musk, potentially prioritizing Musk’s personal interests over those of the company’s shareholders. Warren’s letter referenced a recent court ruling in Delaware that found Musk exerted significant control over Tesla, leading to a controversial equity compensation plan worth billions.
The decline in Tesla’s share price over the past year further emphasized the need for scrutiny over Musk’s actions, according to Warren. Recent statements and decisions by Musk, including his demand for increased voting power within Tesla and his consideration of moving the company’s incorporation site to Texas, have raised red flags about potential conflicts of interest. Musk’s threat to develop artificial intelligence products elsewhere if his demands are not met has also drawn criticism.
In response to Warren’s letter, Musk took to social media to push back, suggesting that Warren’s economic advisor had ulterior motives behind the accusations. The reference to Sam Bankman-Fried, a figure with a controversial past in the cryptocurrency industry, added another layer to the escalating tensions between Musk and Warren. However, a spokesperson for Warren’s office clarified that Bankman had no involvement in the matter at hand.
The Securities and Exchange Commission, led by Chair Gary Gensler, indicated that they would respond directly to members of Congress regarding the concerns raised by Warren, rather than issuing public statements. The ongoing conflicts between Musk and the SEC, stemming from previous allegations of securities fraud related to Musk’s social media activity, have fueled speculation about further investigations into Musk’s business dealings.
As Tesla’s shares fluctuated and closed lower on Thursday, the potential for added regulatory scrutiny loomed over Musk and the company. With tensions escalating between one of the world’s wealthiest individuals and regulatory authorities, the future remains uncertain for Tesla and its outspoken CEO. Warren’s pointed letter to the SEC underscores the growing scrutiny over Musk’s conduct and the implications for Tesla’s shareholders in the turbulent times ahead.