Musk Taunts the SEC in a Tweet on the "Shortseller Enrichment Commission"
Mike Mish Shedlock
Despite the obvious typos, it's clear the agreement is in violation of the principles of his “no-admit, no-deny” settlement with the SEC.
It also proves that there is no oversight of Musk and his Tweets.
“Before the sun sets today, the SEC and his lawyers will be on the phone,” said Stephen Crimmins, a former SEC litigator now at Murphy & McGonigle PC. “It definitely jeopardizes the settlement.”
A key part of the settlement sought to put into place a better way for the company to control his communications.
The settlement must first be approved by a federal judge. On Thursday, U.S. District Judge Alison Nathan asked attorneys for Mr. Musk and the SEC to file a joint letter by Oct. 11 “explaining why the court should approved the proposed consent judgment.”
Such settlements are routinely approved by the courts, and the judge said it was her regular practice to request a justification letter. However, the approval process provides an opportunity for the judge or either party to raise questions about the settlement.
Once the SEC order is in place, Mr. Musk could be charged with violating securities law and breach of a court injunction that was part of the agreement if he is found to have knowingly made new false statements after the settlement.
Musk's only out right now is the SEC agreement has not yet been approved.
However, Musk just gave the court a reason to reject it. Perhaps the SEC requests the court reject it.
If the settlement is rejected, the next set of terms will be much harsher.
This man just cannot keep his mouth shut.
Disclosure: I am short via PUTs.
Mike "Mish" Shedlock