Sen. Elizabeth Warren is calling on the Securities and Exchange Commission (SEC) to launch a probe into Tesla Inc. and its board of directors for potentially violating securities laws over its handling of CEO Elon Musk’s “apparent conflicts” since he purchased and became the chief executive of Twitter.
The Massachusetts Democrat sent a letter to SEC Chair Gary Gensler on Monday calling for the agency to look into the actions of the electric-vehicle giant’s board, saying it “appears to have failed to uphold its legal duty to ensure that Mr. Musk act in the best interest of Tesla,” and have inadequately addressed investors’ concerns “about conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders” due to Musk running Twitter at the same time.
Warren said despite the fact that Linda Yaccarino has already replaced Musk as Twitter CEO, a media report indicates Musk is still “likely to retain ‘significant control'” of the social media platform, and therefore wants the SEC to investigate the matter.
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The senator noted she raised concerns to Tesla board Chair Robyn Denhold in December that Musk may have misappropriated Tesla resources by reportedly having some 50 Tesla employees work on his takeover of Twitter, and “inevitable conflicts of interest” over Twitter’s reliance on advertising dollars from other automakers, which could mean “potential injury to Tesla.”
Warren also pointed to a letter earlier this year from Tesla shareholders, who collectively hold more than $1.5 billion in Tesla shares, calling on the company’s board to rein in Musk – who also led Twitter at the time – and voiced concerns regarding the direction of Tesla.
The shareholders said they were worried that the board is “failing to adequately represent the interests of Tesla’s shareholders.”
Musk later said during Tesla’s annual meeting that he would not be stepping down as CEO of the EV maker, and that the appointment of Yaccarino at Twitter means he would not need to invest nearly as much time in the social media company as he had when he first took it over.
Warren and Musk have sparred multiple times in recent years, with the Tesla CEO brushing off one of the lawmaker’s attacks by referring to her as “Senator Karen.”
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Tesla did not immediately respond to FOX Business‘ request for comment on Warren’s letter to the SEC.
FOX Business’ Julia Musto contributed to this report.