latest automotive news, best new and used cars, find a new car d317d_tesla-model-3-1-610x407-610x407 SEC Gets Serious in Tesla Going-private Probe, Issues Subpoenas: Report Tesla

While the U.S. and now Canada enjoy carrying out international diplomacy via tweet, the business world lays out a few ground rules. If you’re the head of a multi-billion dollar publicly traded company, maybe it’s best to not announce your intention to take the company private — while stating there’s funding on hand to pull it off — in a tweetstorm, especially if there aren’t details to back it up. Dry, boring, but concise media releases or regulatory filings alerting shareholders usually do the trick.

After looking into Tesla’s going-private plan, announced August 7th by CEO Elon Musk over Twitter, the U.S. Securities and Exchange Commission now wants hard answers. While it might be willing to overlook the tweet (Musk, a prolific tweeter, previously told investors that announcements could happen this way), the SEC wants Musk to back up his “funding secured” claim. What person, persons, or entity made this deal possible?

Maybe a round of subpoenas will clear things up.

According to sources who spoke to Fox Business, the SEC has sent subpoenas to Tesla to find out the validity of Musk’s funding claim. That usually signals the start of a “formal” investigation, reporter Charles Gasparino stated. Because it’s 2018, Tesla fans immediately accused Gasparino of secretly working with short sellers to depress the automaker’s stock.

In blog posts published after his tweets, Musk said he’s had conversations with the Saudis, leading many to think that the Saudi Arabian sovereign wealth fund, which owns a 5 percent stake in the automaker, might be the source of the riches. Other financiers might be interested, Musk suggested.

Given that Musk’s tweets and blog posts serve as an investor’s only information on the matter, the SEC feels they’re being kept in the dark. There’s penalties waiting for companies that don’t make themselves crystal clear in these circumstances.

It’s not entirely the procedural equivalent of the Wild West at Tesla. On Monday night, Musk announced the hiring of Silver Lake Partners and Goldman Sachs as financial advisers, with firms Wachtell, Lipton, Rosen Katz and Munger, Tolles Olson serving as legal advisers. Tuesday brought an SEC filing that states the company’s intent to form a special committee to review the plan, once it materializes on paper.

Still, the SEC’s probe looms large over the automaker. Reuters reports Tesla’s board has hired law firm Paul, Weiss, Rifkind, Wharton Garrison to help deal with the SEC investigation.

[Image: Tesla]

Article source: https://www.thetruthaboutcars.com/2018/08/sec-gets-serious-in-tesla-going-private-probe-issues-subpoenas-report/

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