Sen. Elizabeth Warren Urges SEC to Investigate Elon Musk and Tesla, Reigniting Years-Long Feud The two have sparred publicly for years.
By Emily Rella
Key Takeaways
- Senator Elizabeth Warren is urging the U.S. Securities and Exchange Committee to investigate Elon Musk and the Board of Directors at Tesla for a potential conflict of interest pertaining to Musk's takeover of Twitter.
- Warren alleges that Tesla and its Board have not been acting in the best interest of shareholders.
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The ongoing feud between Senator Elizabeth Warren and billionaire Elon Musk is taking a legal turn as Warren is now calling for the Securities and Exchange Commission (SEC) to investigate Musk's Tesla and its Board of Directors for an alleged conflict of interest regarding Musk's $44 billion purchase of Twitter last fall.
The nine-page document, originally viewed by CNBC, accuses Musk of "conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders" since purchasing Twitter, as well as accusing Tesla's Board of "inaction and incomplete disclosures," which "raise questions about possible violations of securities laws and exchange rules which fall under SEC's jurisdiction."
Related: Elon Musk Reignites Feud With Sen. Elizabeth Warren: 'Maybe I Can Have a Cookie or Something'
Warren is calling for an investigation into Musk's sale of Tesla shares in order to fund his takeover of Twitter (and using other financial resources from Tesla to complete the deal). The document also notes conflicts of interest regarding advertising, as some of Twitter's big-name advertisers are direct competitors to Tesla, such as General Motors.
Senator Elizabeth Warren, a Democrat from Massachusetts, speaks during a Bloomberg Television interview on Capitol Hill in Washington, DC (Getty Images)
The senator is also alleging that Musk moved employees between the two companies, which could be breaching labor laws, and failed to disclose to shareholders how Tesla and Twitter have been collaborating.
Although Musk is still chief executive at Tesla, he stepped down as Twitter's CEO in May and appointed former NBCUniversal executive Linda Yaccarino as the new leader of the company.
Related: Elon Musk Slams Elizabeth Warren, Calls Her 'Senator Karen': 'Stop Projecting!'
Warren, however, maintains that Musk still has "significant control" over the company in his positions as both Executive Chairman of the Board and Chief Technology Officer and that he could make financial decisions at Twitter that could include "great deals for Tesla's competitors and potential injury to Tesla."
"Tesla is publicly owned, and Mr. Musk and the Board have responsibilities to shareholders and the public in their management of the company," Warren's letter reads. "Mr. Musk's personal wealth – and his personal relationships with Board members – do not shield him or the Tesla Board from meeting basic SEC governance and disclosure rules."
Elon Musk, billionaire and chief executive officer of Tesla, at the Viva Tech fair in Paris, France (Getty Images)
Over the weekend, Musk revealed that Twitter is still in a negative cash flow state and that the company is soldiering through a "heavy debt load" after losing about 50% of its advertisers.
Musk and Warren have sparred publicly in the past, with Musk most infamously calling Warren "Senator Karen" on Twitter after Warren called out the billionaire for "freeloading" and accused him of not paying taxes after he was named as Time's "Person of the Year" in December 2021.
Musk has yet to publicly comment on Warren's latest move. Twitter replies to press requests with poop emojis.
