Elon Musk, the South African CEO of Tesla – and of other companies – is an ongoing beacon of investment news, and his use of Twitter has had a noticeable influence on the value of particular stocks over the years. Signal Advance, Dogecoin and GameStop are examples of stocks that rose considerably in value after Musk drew attention to them.
Some believe that Musk’s latest round of tweets, this time concerning Bitcoin, could lead to an investigation by the Securities and Exchange Commission (SEC) into Tesla, which recently made a massive investment in the cryptocurrency.
A question of timing
Recently, Tesla announced that it would invest $1.5 billion in Bitcoin. The announcement, coupled with Musk’s tweets voicing support for the cryptocurrency, triggered a spike in the value of the stock. In a matter of days, Tesla’s investment had appreciated considerably.
The former Vice President of the European Central Bank, Vitor Constâncio, noted that the timing of Musk’s tweets could be a central issue of an investigation. “It was not disclosed when Tesla had made this investment,” said Constâncio. “This was followed by many statements that he supported Bitcoin. Bitcoin kept going up, and the Tesla investment has appreciated.”
Musk’s attorneys reportedly warned that his tweets might bring about an SEC investigation due to their tremendous effect on the value of stocks that he or his companies invest in.
Navigating matters of compliance
SEC compliance can be a tricky road to navigate. If you have doubts as to whether you or your company is in compliance, it is always best to consult with an attorney with extensive experience in these matters.
If you have questions about SEC investigations or other civil or criminal exposure in financial matters, please contact the attorneys at Ford O’Brien Landy LLP. We advise and represent clients in New York and Nationwide.
Source: Teslarati, “Tesla Bitcoin purchase could launch SEC investigation, former Branch Chief says,” Feb. 10, 2021