Published: Sat, August 18, 2018
Markets | By Otis Pena

SEC scrutiny of Tesla grows as Goldman hints at advisor role

SEC scrutiny of Tesla grows as Goldman hints at advisor role

Musk's tweet may have violated USA securities law if he misled investors.

"The San Francisco office of the SEC has sent subpoenas to Tesla regarding its privatization plans and Musk's statement to determine whether the billionaire inventor intentionally misled investors", reported Fox Business. The Saudi fund has acquired almost 5 percent of Tesla by accumulating shares on the open market.

SEC spokeswoman Judith Burns and a Tesla spokesman declined to comment. One lawsuit claims over a dozen banks and technology firms "weren't aware of funding being locked in before Musk's tweet". Even before Musk's message on August 7, the SEC had been inquiring about issues at Tesla.

The company followed up with a lengthy blog post from Musk about what it would take to make Tesla private instead of publicly traded.

Tesla says it has formed a special committee of three independent directors to asses any proposal from Mr Musk.

"The whole format of his announcement was highly problematic and very unusual", Harvey Pitt, a former SEC chairman who now leads advisory firm Kalorama Partners, said Wednesday on Bloomberg Television.

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Musk will also likely require clearance from USA national security officials if financing comes from Saudi Arabia, according to Bloomberg. And while it looked as though Saudi Arabia may or may not have been the money behind the statement, it also raised questions as to the timing - and legality - of Musk's tweet.

In June Tesla sued Tripp for alleging that he hacked the company and transferred secret information to third parties.

CNBC reported on Wednesday that Goldman Sachs had been hired to advise Tesla.

The representatives of Tesla were sure that Elon Musk was "out of control" and asked him to stop discussing the situation in the company on Twitter.

One director, Steve Jurvetson, is now on leave of absence. Wilson Sonsini Goodrich and Rosati will be legal counsel for Tesla itself.

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