SEC Subpoenas Tesla About CEO's Buyout Plans: Report - NBC10 Boston
National & International News
The day’s top national and international news

SEC Subpoenas Tesla About CEO's Buyout Plans: Report

The subpoena signals regulators have now opened a formal investigation

    processing...

    NEWSLETTERS

    SEC Subpoenas Tesla About CEO's Buyout Plans: Report
    Joshua Lott/Getty Images, File
    In this June 14, 2018, file photo, engineer and tech entrepreneur Elon Musk listens to Chicago Mayor Rahm Emanuel during a news conference in Chicago, Ill.

    Government regulators have subpoenaed Tesla as they dig deeper into CEO Elon Musk's recent disclosure about a potential buyout of the electric car maker, according to media reports.

    The subpoena from the Securities and Exchange Commission demands information from each of Tesla's nine directors, according to a story published Wednesday in The Wall Street Journal . The newspaper cited an unidentified person familiar with the matter after Fox Business News reported the SEC's move.

    Both Tesla and the SEC declined to comment Wednesday.

    The SEC opened an inquiry shortly after Musk surprised investors with an August 7 tweet revealing that he had lined up the financing to buy all the Tesla stock from shareholders willing to sell.

    Clerk Pulls Out Machete on Would-Be Robber

    [NATL] Clerk Pulls Out Machete on Would-Be Robber

    A would-be robber armed with a knife had a surprise in store when an Alabama store clerk pulled out a machete in defense. The two's brief knife fight was caught on camera before the clerk runs out to damage the robber's car.

    According to police, suspect Seth Holcomb walked up to the counter to make a purchase. He leaves the store and then comes back in as if to make a second purchase. Then, he pulled out a knife at the counter. What he didn't expect was that the clerk would pull out a machete of his own.

    (Published Wednesday, March 20, 2019)

    The subpoena signals regulators have now opened a formal investigation into whether Musk was telling the truth in his tweet about have financing locked up for a deal that analysts have estimated would require $25 billion to $50 billion.

    Under a scenario sketched out by Musk in a Monday blog post , the deal would cost at the lower end of those estimates. Musk also revealed in the same post that he had been talking to Saudi Arabia's sovereign wealth fund about providing the money for a buyout that would end Tesla's eight-year history as a publicly held company, but he added that the financing was still contingent on due diligence.

    Corporate governance experts say that caveat shows the financing of the deal isn't finalized, as Musk initially indicated, a contradiction that could be used to prove he deliberately misled investors with his tweet.

    YouTube Mom Accused of Abusing Foster Kids for Clicks

    [NATL] YouTube Mom Accused of Abusing Foster Kids for Clicks

    Machelle Hackney of Maricopa, Arizona, is accused of forcing her adopted children to participate in her YouTube channel and abusing them if they did not recall their lines or perform as directed. Hackney's channel had accrued hundreds of millions of views since she joined in 2012.

    (Published Wednesday, March 20, 2019)

    After Musk dropped his bombshell, Tesla's stock surged 11 percent in one day, damaging a class of investors who had been betting the company's shares would decline. Musk has had a long-running battle with that group of investors, who are known as "short sellers" in Wall Street's parlance.

    Tesla's stock has backtracked since that one-day pop last week, but at least two lawsuits have been filed against the company on behalf of shareholders alleging Musk broke the law with his tweet, and now the SEC is taking a closer look too.

    Meanwhile, Tesla's board has formed a three-person committee to assess a potential buyout by Musk while leaving the door open for other offers, too. The independence of one director on Tesla's buyout committee, Brad Buss, has been questioned by two shareholder advisory firms.