Elizabeth Warren urges SEC to investigate Tesla Board

Key Points

• 📑 US Senator Elizabeth Warren has called for an investigation by the Securities and Exchange Commission (SEC) into Tesla and its Board of Directors.
• 📝 Warren’s letter cites concerns about possible conflicts of interest, misappropriation of corporate assets, and lack of independence of the Tesla board from CEO Elon Musk.
• 🚫 The investigation request stems from Musk’s acquisition of Twitter and potential violations of labor laws when Tesla employees were temporarily assigned to work on Twitter.
• 📉 Warren raises questions about incomplete disclosures and possible violations of securities laws and exchange rules that fall under the SEC’s jurisdiction.
• 📧 The SEC’s response to Warren’s letter will be directed to her directly, according to the Office of Public Affairs spokesperson.

US Senator Elizabeth Warren has sent a letter encouraging the Securities and Exchange Commission (SEC) to investigate Tesla and its Board of Directors. The official’s letter cited possible “conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders” related to Elon Musk’s acquisition of social media platform Twitter. 

Warren’s nine-page letter, which was sent to SEC Chair Gary Gensler on Monday, mentioned the Tesla board’s “apparent lack of independence” from the CEO. It also cited “inaction and incomplete disclosures,” as well as “questions about possible violations of securities laws and exchange rules which fall under SEC’s jurisdiction.” 

When Elon Musk took over Twitter last year, he implemented a number of changes to the social media platform. These included cutting off a large portion of Twitter’s headcount, as well as the rapid rollout of new features. Musk also brought over workers from his other companies to help the social media platform function with a much more optimized workforce. 

Warren, for her part, wrote that “possible violations of state and federal labor law” might have happened when Musk brought over Tesla employees to temporarily work on Twitter. She also argued that the Tesla board had not informed shareholders about how the electric vehicle maker and Twitter have worked together, or how they may work together, as noted in a CNBC report. 

Despite advertising veteran Linda Yaccarino being appointed as Twitter’s new CEO, Warren noted in her letter that Musk is still left in charge of the social media platform. Musk, after all, still serves as Twitter’s CTO and executive chairman.

“Despite hiring Ms. Yaccarino, he is likely to retain ‘significant control’ over the company1 and intends to continue overseeing core functions of the business.2 Given the concerns about the actions by Mr. Musk and the Board, I ask that the SEC conduct a review to determine if they have complied with relevant securities laws,” Warren wrote. 

The US Senator also reiterated concerns that were raised in an earlier communication with Tesla Chair Robyn Denholm last December. As per a spokesperson from the SEC’s Office of Public Affairs, Gentler will “respond to Members of Congress directly.” 

Warren’s letter can be viewed below.