A few weeks ago, TheStreet asked if anyone is actually overseeing Tesla CEO Elon Musk's tweets. Now we have our answer: Nope.
In an interview with 60 Minutes, Musk declared "I do not respect the SEC" and denied that anyone at Tesla is reviewing his Twitter account, citing first amendment rights. He also brushed off the suggestion that he would be subject to oversight by Tesla's new board chair, Robyn Denholm, who was appointed to replace in November.
Musk's comments in the interview raise more questions about Musk and Tesla's relationship with the SEC, and more broadly, on how Tesla is run.
It's not the first time that Musk has publicly thumbed his nose at the SEC. In early October, just days after settling with the agency over charges that he falsely told investors he had "funding secured" for a go-private transaction, he sent a tweet referring to the SEC as the "shortseller enrichment commission."
That settlement required that Musk pay a fine of $20 million, step down as chairman of the board for three years, and to have someone at Tesla oversee Musk's Twitter account, described as "an obligation to oversee Musk's communications with investors" by Steven Peikin of the SEC's enforcement division.
Since then, some Tesla observers have gone further in saying that the carmaker may benefit from reduced direct involvement by Musk in the company. Last week for example, Jeffries analyst Philippe Houchois suggested in a note to clients that "Elon Musk's erratic behavior makes us wonder if he might be considering reducing his direct involvement in Tesla to focus on product/vision/other ventures...we think such a move might be better suited to Mr. Musk's talents than driving manufacturing efficiency and would benefit Tesla."
For his part, Musk appeared dismissive of the idea that Denholm would hold sway over whaetever he chooses to do at the company.
"It's not realistic in the sense that I am the largest shareholder in the company," Musk told 60 Minutes, in response to a question about Denholm's oversight of him. "I can just call for a shareholder vote and get anything done that I want."
Investors didn't seem overly perturbed by Musk's provocative remarks on 60 Minutes, with Tesla's stock closing 2.01% higher on Monday. Others found Musk's comments a bit more unsettling.
"He's daring the chairman to go after him, and I don't know why he's daring him because he's got some sort of financial death wish, or he's daring them because he's just saying they're a bunch of jokers. It's ill-advised no matter what," Jim Cramer told TheStreet's Katherine Ross on Monday. "It would not surprise me if we heard from the SEC on this."
David Lavan, a former SEC special counsel and partner at Dinsmore & Shohl LLP, had a similar reaction to Musk's latest insult directed towards the regulatory agency: "For sure, they don't make people at the SEC happy," Lavan said, noting that settlement agreements are typically drafted in a way that leaves room to 'rip up' the deal if the SEC believes a person or company is not complying with the terms.
One of those terms was a condition that Tesla install someone to monitor Musk's Twitter account, but on Sunday, Musk said that no such oversight was happening and that if a tweet doesn't have a probability to move the stock, it's: "'Hello, First Amendment'. Freedom of speech is fundamental," he said, adding vaguely that "nobody's perfect" should mistakes happen.
"He was talking about free speech rights, but a significant exception to that is commercial speech," Lavan added. "His actions did affect people in the market; the stock moved, people made money and people lost money on something that was not what he said it was. And I think then the ball is back in the SEC's court again."
Reached on Monday, the SEC declined to comment on Musk's remarks on 60 Minutes.
Lavan added that it's possible the agency might revisit the settlement if they suspect that terms are being ignored.
"Here's somebody who is wealthy enough to say he doesn't care. What could they do to persuade him that he should?" Lavan added. "I think he's kind of daring them to do something."