Democratic Senator Elizabeth Warren is calling on the SEC to probe into possible violations of securities laws by Tesla and its board of directors concerning the actions of CEO Elon Musk. In a nine-page letter to SEC Chair Gary Gensler, Warren aired concerns over Musk’s Twitter takeover, highlighting potential “conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders.”
These concerns arose after Musk led a $44 billion buyout of Twitter in December 2022, a deal that included $13 billion in debt. Musk reportedly sold a substantial portion of his Tesla shares to finance the acquisition, subsequently becoming CEO of Twitter, where he instigated numerous changes, significantly downsized the workforce, and enlisted Tesla and SpaceX employees to aid him.
Warren criticized the Tesla board’s “apparent lack of independence” from Musk and expressed concern that the transfer of Tesla employees to Twitter might constitute “possible violations of state and federal labor law.” Furthermore, she suggested that Tesla’s board failed to disclose to shareholders adequately how Tesla and Twitter might collaborate.
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Recently, Musk installed Linda Yaccarino, formerly of Comcast’s NBCUniversal, as Twitter CEO, a move which has led to speculation that Twitter’s ailing advertising sector may recover. Despite this, Musk remains in control at Twitter as its CTO and executive chairman, which Warren believes could present potential conflicts of interest. Specifically, Musk might operate Twitter to enhance much-needed revenue, potentially favoring Tesla’s competitors, or run Twitter in a way that benefits Tesla, possibly through biased algorithms or free advertising.
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