Elon Musk proves once again that rules and norms don’t apply to him

Elon Musk proved once again that he will do things his own way, and announced on Friday that he would $44 billion deal to buy Twitter is suspended. This news was shared in a tweet and not in an official filing with the Securities and Exchange Commission. The drama about the deal continued to appear in A Tweet thread between Musk and the company.
Because of The Supreme Education Council ruled in 2013 That using Twitter and other social media platforms is an acceptable way for public companies to disclose material information, this may be one of the legal ways in which custom has been violated.

But many of Musk’s other moves over the years violated actual rules, and not only did he get around the standards, but none of them slowed him down or changed his behavior.

The financial penalties that regulators or business partners might impose don’t mean much to someone as wealthy as Musk. He walks, tweeting proof that normal rules don’t apply to the super-rich if they choose to ignore them.

One such example: catch recently It acquired nearly 10% of Twitter Shares – without making the legally required public disclosure in a timely manner.

An investor who buys 5% or more of a company’s stock has 10 days to disclose his purchases, so that other investors can be aware of what affects stock prices.

Musk waited 21 days to disclose, at which point he had completed buying 9.6% of Twitter’s stock. Sent acquisition news Twitter Shares rose even before he announced his attempt to buy the platform and make it private.

Had Musk submitted the required filing in time, it would have likely cost him a lot to accumulate the 15 million shares he bought after the 10-day deadline.

The belated disclosure saved Musk $143 million by keeping the stock price lower than it would have been while continuing to buy shares, estimates Daniel Taylor, an accounting professor at the University of Pennsylvania.

The The Wall Street Journal I reported last week that the Securities and Exchange Commission is investigating Musk’s belated reports on his Twitter stake.

“I think it might be laziness or a belief that the rules don’t apply,” Taylor said. “But if you look at when the Securities and Exchange Commission (SEC) mandates late filing, it is relatively rare. In terms of cost and benefit, it makes sense not to file it. Even if the cost of late reporting is a $100,000 fine or a fine of several million of dollars, why not [delay filing]? “

Musk’s previous big fight with the Securities and Exchange Commission came back in 2018, when he tweeted that he participated ‘Finance secured’ to take Telsa privateBy sending stocks to the top, he just encouraged the billionaire.
Musk at the end Pay a fine of $20 million He relinquished his position as Tesla’s chairman, though he retained the title of CEO, which the SEC threatened to strip as well. He must also have tweets with material information about Tesla that others in the company have agreed to, but it’s not clear how well he’s complied with that requirement over the past four years.

Musk remains angry about that settlement he signed with the Securities and Exchange Commission, claiming he only did so because the banks were going to cut Tesla’s financing and force the automaker into bankruptcy. But Taylor said the SEC’s action was nothing more than a slap on the wrist.

“They had the opportunity to send a strong signal and they chose not to,” Taylor said.

Other rules Musk ignores

The regulations on disclosing ownership stakes are just the latest in a long line of rules that Musk has broken — with few, if any, consequences.

Traditional automakers issue recalls when they discover a flaw in the design or construction of a vehicle. That’s why the National Highway Safety Administration, the federal regulator, appointed the office that looks at consumer complaints and accident data the Bureau of Defect Investigation.

But Tesla has been ordered to issue recalls to build its cars precisely as planned. Musk complied, but also attacked safety regulators for demanding that they build his vehicles less ‘fun. And Tesla has not incurred any significant costs for its actions.
Tesla features that have paid for redemptions include allowing front seat passengers – and potential drivers – to do so play video games on the touch screen in the middle of the dashboard while the car is in motion and enabling cars to operate on purpose Rolling through the stop signs When in self-driving mode.
Musk also fought with the FAA over testing SpaceX rockets without the required permission. In 2020, for example, the company conducted a short test flight of its prospective Mars missile, called Starship, without giving proper documentation or assessments to the Federal Aviation Administration (FAA) of the risks it might be exposed to.public health and safetyAccording to the agency.

Even before the test flight took off, the FAA refused a safety waiver requested by SpaceX. But the company went ahead anyway.

An FAA investigation followed, but SpaceX eventually walked away with more than one order of “corrective actions.”

During the early days of the musk epidemic He reopened his Tesla factory in California that was on lockdown due to the stay-at-home orders he attacked”fascist. ”
The county health department, which ordered the closure of businesses to stop the spread of Covid-19, finally Subject to plans to reopen.

CNN Business’s Jackie Wattles contributed to this report


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