Tesla (NASDAQ:TSLA) CEO Elon Musk’s past run-ins with the SEC (Securities and Exchange Commission) are a well-documented affair. It seems like Musk may be about to clash with the SEC again, this time over his acquisition of Twitter (now X).
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Musk’s Twitter Trades
The securities watchdog is probing Musk’s late disclosure of his acquisition of Twitter shares before he acquired the company. Back in 2022, Musk did not disclose his stake in the social media platform until it was over 9% and he had an invitation to join the company’s board.
Potential Violation of Norms
Subsequently, Musk took Twitter private, renaming it X. Now, a separate lawsuit between the Oklahoma Firefighters Pension and Retirement System and Musk has brought his Twitter trades into the spotlight once again. According to Musk’s previous testimony, the Tesla CEO and his adviser may have skirted a disclosure norm that necessitates revealing holdings in a company once the stake crosses the 5% mark.
The testimony points to Musk potentially violating norms in order to keep his Twitter trades under wraps, preventing the company’s share price from skyrocketing while he bought its shares.
What Could Come Next…
While the SEC is yet to file any enforcement action against Musk for fraud, a complaint from the Commission could include regulators seeking to bar Musk from acting as an officer or director at a public company. Such a scenario could expose Musk to a possible removal from Tesla.
Is Tesla Stock Bullish or Bearish?
Not surprisingly, Tesla’s shares are ticking marginally lower today. The stock is down by nearly 35% over the past year. Meanwhile, the TipRanks Technical Analysis tool is currently flashing a Buy Signal for Tesla on a daily timeframe, indicating potential Bullish in the company’s share price.
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