Can anyone knowledgable of this kind of stuff comment on the likely outcome of the situation and scenarios (without sensationalizing)? If found guilty, not guilty, penalty (jail, fine, other), investigation time, length, impact on other companies like SpaceX, gravity/frequency of the event vs other companies / offenses, etc.?
Tesla Faces U.S. Criminal Probe Over Musk Statements
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Re: Tesla Faces U.S. Criminal Probe Over Musk Statements
#82Earlier quoted context omitted.
I'm not super knowledgeable in the stock market, what would he have gained from destroying the shorts? I understand that shorts are effectively a bet that the stock will go down but do they actually damage the company in any way? At a glance it sounds like trying to break the thermometer because you think it's too cold out there, the stock wasn't at risk because of the shorts, instead there were shorts because some i…
Shorts drive the price down, making it more expensive for the company to borrow from the market by selling stock. They have to sell more shares to receive a similar amount.
Also the shorts try to push the stock down via endless false rumors (there are real challenges to tesla of course) about bad cars, crashes, fires, etc, and those false rumors must prevent some people who just don't have time for so much drama from looking into them.
Re: Tesla Faces U.S. Criminal Probe Over Musk Statements
#83The sad piece of karma in all of this is that Musk tweeted in an effort to destroy the shorts. His tweet turned out to: - give the shorts a big dip in his stock, - an investigation by the SEC - an investigation by the DOJ - the backing off of a deep pocketed investor in the Saudis - Him potentially being personally liable, which would mean having to step away from SpaceX and Tesla if he was found guilty of fraud. Thi…
The small upside of this is that maybe Musk will be convinced to settle the libel suit that was announced yesterday [0]. For the suit filed in the UK, the max loss would be ~$400K (unless it goes to trial and he ends up paying Vern Unsworth's legal costs), and it would spare us the sad spectacle of Musk trying to prove that Unsworth is a pedo.
[0] https://www.buzzfeednews.com/article/ryanmac/cave-rescuer-su...
Re: Tesla Faces U.S. Criminal Probe Over Musk Statements
#84Earlier quoted context omitted.
> So, anyone can get away with a crime if they're overstressed? Are you putting words in my mouth on purpose? I'm not arguing that he shouldn't be investigated. I'm arguing that "trying to screw over short sellers" is not the only and "obvious" reason why he could have made the tweet.
He then went and taunted short sellers on Twitter when the stock went up in response to his tweet. Also I don't believe his intent matter for criminal liability in market manipulation.
> He then went and taunted short sellers on Twitter when the stock went up in response to his tweet.
Source? I legitimately haven't seen this.
> Also I don't believe his intent matter for criminal liability in market manipulation.
I'm not saying it does. Where did I say it does? I don't understand why I keep getting this response.
Re: Tesla Faces U.S. Criminal Probe Over Musk Statements
#85Earlier quoted context omitted.
>Gut says, long term Tesla will be fine and little will to come of this investigation. Or this could be their DeLorean moment. People's guts are notoriously bad at predicting the future.
Out of curiosity, what was the DeLorean moment? I know DeLorean didn't succeed in the long term. But what was this "moment" you're talking about? Google gave me nothing.
Probably DeLorean's attempt to traffic cocaine in order to keep the company afloat:
> On October 19, 1982, DeLorean was charged by the U.S. government with trafficking cocaine following a videotaped sting operation in which he was recorded by undercover federal agents agreeing to bankroll a cocaine smuggling operation. The FBI set him up with more than 59 pounds (27 kg) of cocaine (worth about US$6.5 million) in a hotel near Los Angeles International Airport after arriving from New York, and the Federal Bureau of Investigation stated DeLorean was the "financier" to help the financially declining company in a scheme to sell 220 lb (100 kg), with an estimated value of US$24 million.
Re: Tesla Faces U.S. Criminal Probe Over Musk Statements
#86There are a lot of things to respect about Musk. But he lied on twitter in a direct effort to cause financial harm to people shorting Tesla stock. You can't do that. He should go to jail.
This.
I'm sick of people giving high-profile people in the tech sector a pass on their shitty behaviour because of the pervasive hero-worship culture. Jobs, Zuck, Torvalds, etc.
Irrespective of Musk "caring too much" or whatever other justification his fans have concocted, this is exactly the sort of behaviour (lying to manipulate the market) we have laws to prohibit.
We see articles every so often about how Tech as an industry needs to play catch up on the Ethics side of things. Now's the chance.
Re: Tesla Faces U.S. Criminal Probe Over Musk Statements
#87There are a lot of things to respect about Musk. But he lied on twitter in a direct effort to cause financial harm to people shorting Tesla stock. You can't do that. He should go to jail.
This is a massive oversimplification. Musk may be in peril but this is not as cut-and-dried a case of fraud like you make it seem. Consider this recent comment from the SEC: “When you talk about fraud,” [Jina Choi of the SEC] answered, “you’re talking about a state of mind, you’re talking about mens rea. We call it scienter. You have to do something with intentionality. The idea of just making a misstatement doesn’t…
> That telegraphs a pretty lenient stance on misstatements that aren't completely fabricated
American commercial law goes out of its way to avoid criminalizing stupidity. At a certain level, the difference between a genius and a madman is the genius was correct. They are indifferentiable without the benefit of hindsight.
The nail in Elon's coffin (or lack thereof) will probably revolve around the degree to which he documented his animus towards short sellers in the days leading up to the misstatement.
Re: Tesla Faces U.S. Criminal Probe Over Musk Statements
#88The sad piece of karma in all of this is that Musk tweeted in an effort to destroy the shorts. His tweet turned out to: - give the shorts a big dip in his stock, - an investigation by the SEC - an investigation by the DOJ - the backing off of a deep pocketed investor in the Saudis - Him potentially being personally liable, which would mean having to step away from SpaceX and Tesla if he was found guilty of fraud. Thi…
Not to mention the lawsuit for calling that diver in Thailand a pedo.
Right or wrong (the dude certainly seems not to be a pedo), Musk is the ceo of a currently near-failing company unable to produce and deliver cars as promised. And a defamation suit is what he's spending his time on? I'd be livid were I an employee.
Re: Tesla Faces U.S. Criminal Probe Over Musk Statements
#89Earlier quoted context omitted.
It's not a fact that he lied. He believed he had funding and explained the rational behind that. He wasn't making it up. Intent matters. Certainly, it was a reckless thing to say and a bad idea given that it wasn't 100% closed. "Secured" was the wrong word to use, no doubt. Elon: "I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of…
Intent does not matter. If Musk got up on Twitter and announced "I have secured orders for fifty million cars at $50000 each" because he was drunk at 8am, that would not be excusable either.
Intent matters enormously in US criminal law.
Re: Tesla Faces U.S. Criminal Probe Over Musk Statements
#90Earlier quoted context omitted.
> but it seems basically obvious to all observers. It doesn't seem obvious to me. It seems like one of a few interpretations, not limited to: - Elon was overly stressed (as has been documented recently) and didn't think before posting such an impactful statement - He considers twitter to be an official outlet for Tesla and just continued with his tendency to publicise his decisions and thought process constantly. - H…
So, anyone can get away with a crime if they're overstressed? or just Elon? > His idea of "secured" is simply different from the SEC definition ... He is the CEO. He's not allowed to have a different definition. Words mean things. That's how we communicate.
> Words mean things. That's how we communicate.
Yes, but words are often nuanced and ambiguous. It's why we have an entire legal system to interpret exactly what "words" mean.