Earlier this week, the U.S. Securities and Exchange Commission announced charges against former Nikola CEO Trevor Milton alleging he repeatedly disseminated false and misleading information “typically by speaking directly to investors through social media.”
The government alleges Milton used his social media accounts to mislead investors about “Nikola’s technological advancements, products, in-house production capabilities, and commercial achievements.” As the director of the SEC’s Division of Enforcement, Gurbir Grewal, pointed out “Having chosen to promote Nikola through social media, Milton was obligated under the securities laws to communicate completely, accurately and truthfully.”
Needless to say, there are a few similarities between Milton and Tesla CEO Elon Musk. Musk is a prolific tweeter and occasionally makes bold claims on social media, which don’t pan out.
Also Read: Elon Musk Settles With SEC – Will Resign As Tesla Chairman And Pay $20 Million Fine
While Musk’s tweets have already gotten him into trouble, the government’s charging of Milton could be bad news for the outspoken executive. In particular, Musk’s tweets about products, technologies and when they will arrive could be an issue.
This was brought up during yesterday’s SEC press conference as CNBC noted a reporter asked “Elon Musk has made a number of statements, some of which have been provably false, on Twitter. Are you [Grewal] going to take a second look at Mr. Musk’s statements under this administration or is that something you’ve been following closely?” Grewal declined to comment in regards to Musk, but noted “Regardless of the methods used by corporate officials, we will hold them accountable for materially false statements that they make, especially in cases where investors are hurt as alleged here.”
There’s a bit of leeway with materially false statements, but Tesla and Musk don’t exactly have the best track record when it comes to hitting deadlines. Just a few days ago, the company announced their Semi was being pushed back to 2022. They also hinted the Cybertruck was being delayed, which isn’t surprising as the second-generation Roadster was supposed to arrive in 2020 and still hasn’t been released.
