Tesla CEO Elon Musk revealed that he was forced to accept the SEC “bastards” deal in 2018 as the banks threatened to cease providing capital if he didn't, which would immediately bankrupt the company.
The US Securities and Exchange Commission (SEC) case against Tesla and Elon Musk in 2018 is very high-profile. Since the manufacturer and its CEO had to make a deal and pay a multi-million dollar fine, this case is considered to be a win for the SEC. However, the public is not aware of all the details of the case, and Musk lifted the veil during his talk at Technology Entertainment and Design (TED) in Vancouver and gave some details.
The head of Tesla said that funding for his company's privatization was actually secured at the time he posted his tweets in the summer of 2018. However, the SEC continued an active public investigation, which harmed the company significantly. Thus, under pressure, Musk was forced to unlawfully give in to the SEC.
“So I was forced to concede to the SEC unlawfully. Those bastards,” he said.
The complexity of the situation was that the banks began to threaten to stop providing capital to Tesla if Musk did not agree to the SEC settlement, which would immediately make the company bankrupt. Creating a company from scratch, investing so much time and effort into it, and completely sacrificing personal life for this, it was unacceptable. Musk raised Tesla like a child, because the company had an important mission ahead. Under such tremendous psychological pressure, he felt compelled to settle with the SEC.
“So that's like having a gun to your child's head,” Musk said. “I was forced to admit that I lied to save Tesla’s life and that’s the only reason,” he added.
Musk and Tesla paid civil fines of $20 million each — and Musk stepped down as chairman of Tesla — to satisfy the SEC's claims. In the end, this lie was for the benefit of Tesla, as it led to the fact that the company developed further, bringing an invaluable contribution to the future of mankind.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.