On July 17, Senator Elizabeth Warren called on the US Securities and Exchange Commission (SEC) to investigate two companies led by Elon Musk, namely Tesla and Twitter, over potential legal and ethical issues
Warren began by reiterating concerns she sent to Tesla in December 2022, all of which related to Musk’s dual leadership roles at Tesla and Twitter.
Warren alleged that, following Musk’s acquisition of Twitter, he may have misused Tesla resources by transferring more than 50 employees from Tesla to Twitter. In her letter to the SEC, she suggested that the transfer of employees may have costs relevant to investors and said the action could be a violation of state and federal law.
She also suggested that conflicts of interest may arise around promotion. Musk could potentially give Tesla a boost in Twitter’s algorithms or offer Tesla free ads. Alternatively, Twitter could accept ads from rival car companies, generating direct revenue at the expense of Tesla investors, Warren said.
Warren also noted that Tesla investors have written an open letter criticizing Musk’s focus on non-Tesla companies and demanding a leadership succession plan. She added that Musk’s recent hiring of Linda Yaccarino as CEO of Twitter does not remove a conflict of interest due to his continued role as Twitter’s CTO.
The senator further noted that Musk has appointed friends and family members to Tesla board positions and noted other signs that the board generally lacks independence.
She cited several areas of securities law under which the SEC could potentially launch an investigation, most of which relate to Tesla’s failure to disclose the aforementioned issues.
Musk, Warren are both focused on crypto
Tesla is a Bitcoin investor and owns 10,725 BTC ($321.6 million), according to some reports. The company also accepts Dogecoin (DOGE) as payment for some goods.
Musk had also proposed integrating Dogecoin with Twitter before acquiring the company, a proposal that has so far only resulted in a change to the company’s logo.
Warren, meanwhile, is known for her anti-crypto stances. She has criticized the use of cryptocurrency in sanctions evasion and drug trafficking and has called for investigations into Binance and other companies. She has also directly opposed cryptocurrency, infamously stating that she is “building an anti-crypto army”.
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