(USNewsMag.com) – On July 17, Massachusetts Sen. Elizabeth Warren sent the U.S. Securities and Exchange Commission a letter asking them to investigate Tesla as well as its board of directors in relation to Elon Musk’s purchase of Twitter.
Warren raised the concerns in a December 2022 letter to Tesla Chair Robyn Denholm. Musk purchased Twitter in November 2022 for $44 billion, including $13 billion in debt, with Musk reportedly selling his Tesla shares to finance the purchase. Since the takeover, Musk has been CEO of Twitter. However, he has since hired a new Twitter CEO, Linda Yaccarino.
In her nine-page letter to SEC Chair Gary Gensler, Warren questioned whether the purchase amounts to a conflict of interest, has negative impacts to shareholders of Tesla or violated securities laws and exchange rules which are under the jurisdiction of the SEC.
The letter says that Tesla’s board of directors did not ensure it acted in the best interests of its shareholders. Warren also questioned if shareholders of Tesla were informed as to ways the two companies could work together.
In the letter, Warren questioned whether Musk taking Tesla employees and moving them over to Twitter was a possible violation of both federal and state labor laws. After the purchase, Musk authorized Tesla and Space-X employees to work at Twitter after three-quarters of the Twitter staff was cut.
Warren’s letter said that even though Musk is no longer CEO, he is still executive chairman and CTO which Warren says could lead to a conflict of interest.
After a 2018 tweet saying he was considering taking Tesla private, the SEC charged Musk with civil securities fraud. In 2019, Musk paid fines and a revised consent decree was agreed on which stated tweets Musk’s posts about Tesla must be reviewed and approved by a Tesla securities lawyer before being posted. However, Musk sought to have the agreement modified. In May of this year, the request to modify or end the agreement was rejected by a federal appeals court judge.