Elon Musk Could Face SEC Investigation Over Tesla’s Bitcoin Buy, Lawyers Warn
The US Securities and Exchange Commission (SEC) may investigate Elon Musk over Tesla’s $1.5 billion purchase of bitcoins, some legal experts, including a former SEC compliance officer, warn. Given the timing of Tesla’s bitcoin purchase and Musk’s numerous tweets on the subject, some say the SEC will investigate the matter.
Elon Musk may have complied with the SEC’ssample.
Regulators may be going to investigate Tesla CEO Elon Musk over his company’s purchase of bitcoins, The Telegraph reported Tuesday. Last week, SEC filings revealed that Tesla purchased a significant amount of bitcoins in January. We have invested a total of $1.50 billion in bitcoin….. We plan to accept bitcoin as a payment method for our products in the near future, the document said.
Doug Davison, a partner at Linklaters and former enforcement officer for the SEC, said:
It’s not surprising, given the attention on the CEO’s tweets, bitcoin prices, and recent dramatic market movements, that the SEC is asking questions about the facts and circumstances here.
Tesla and Spacex CEO tweets about bitcoin and dog bones. The 29th. In January, he changed his Twitter profile to say only #bitcoin, then tweeted: In retrospect, it was inevitable. A few days later, he voiced his public support for bitcoin, saying that cryptocurrencies were a good thing and that bitcoin was really on the verge of being widely accepted by conventional financiers. His Twitter profile no longer says #bitcoin.
Vitor Constancio, who was vice president of the European Central Bank (ECB) until May 2018, said in a tweet: This was not disclosed when Tesla made this investment. In December, Musk announced that Tesla might buy bitcoin, and numerous statements about his support for bitcoin followed. He added:
Bitcoin continues to grow, and Tesla’s investment has increased in value. The Commission des opérations de bourse will look into the matter.
Some think the Securities and Exchange Commission won’t find anything suspicious when it investigates Musk. Among them is Thomas Gorman, a partner at the international law firm Dorsey Whitney and former senior counsel to the SEC. He expects Securities and Exchange Commission staff to review Musk’s social media comments to determine that they reflect only his personal beliefs.
However, some people believe that Musk manipulated the price of BTC to buy cheap coins. Among those who think the Securities and Exchange Commission has reason to be concerned is NYU Stern School professor Nouriel Roubini, aka Dr. Doom, who has long been a bitcoin skeptic. He called Musk’s actions a form of market manipulation and urged the SEC to investigate the Tesla CEO.
Musk has had trouble with the Securities and Exchange Commission before. In 2018, the Securities and Exchange Commission sued Tesla’s CEO for securities fraud in connection with a tweet about his electric car company. Musk and Tesla reached a settlement with regulators and paid a $40 million fine. Less than six months later, however, the Securities and Exchange Commission filed a complaint against Musk for another tweet that the agency said violated an earlier settlement agreement.
Do you think the Securities and Exchange Commission is investigating Elon Musk over Tesla’s purchase of bitcoins? Let us know your comments in the section below.
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