Senator Elizabeth Warren Raises Alarm

Senator Elizabeth Warren, D-Mass., has taken a bold step, urging the U.S. Securities and Exchange Commission (SEC) to investigate Tesla and its board of directors. The focus of this investigation revolves around possible conflicts of interest and misappropriation of corporate assets related to CEO Elon Musk's involvement with Twitter.

In a nine-page letter sent to SEC Chair Gary Gensler on Monday, Warren raises concerns about the apparent lack of independence of Tesla's board from Musk and highlights instances of inaction and incomplete disclosures that could potentially violate securities laws and exchange rules within the SEC's jurisdiction.

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Not the First Time for the Doge Father

This is not the first time Senator Warren has expressed concerns about Musk's Twitter takeover. In December 2022, she had written to Tesla Chair Robyn Denholm, highlighting the potential conflicts arising from Musk's $44 billion buyout of Twitter, which included a significant $13 billion debt. Musk reportedly sold billions of dollars worth of his Tesla shares to finance the transaction.

Post the takeover, Musk appointed himself as Twitter's CEO. It introduced sweeping changes to the platform, including a drastic reduction in staff and the involvement of employees from both Tesla and SpaceX. 

Specifically, Warren expressed concerns about potential violations of state and federal labor laws and Tesla's failure to adequately inform shareholders about how the two companies would operate together. Moreover, she questioned the arrangement, which leaves Musk in a position of authority at Twitter while maintaining his role at Tesla, potentially leading to conflicts of interest.

It is worth noting that Elon Musk and the SEC have already had clashes in the past. In 2018, Musk's tweets about considering taking Tesla private for $420 per share, with "funding secured," led to civil securities fraud charges. As a result, Musk and Tesla faced fines and entered into a consent decree to settle the charges.

Earlier in 2021, Musk also revealed in 2021 that he had personally purchased Bitcoin, Ethereum, and Dogecoin. The crypto-stance of Musk made many people believe that Twitter's takeover would significantly impact the digital asset industry.