Tesla to Texas

But Elon Musk is different. Elon Musk is constantly pushing the boundaries of the securities laws, but in complicated ways that are arguably allowed. He’s not running around doing funny frauds; he’s running around tweeting ambiguous winking things. And he is maximally aggressive, and hires maximally aggressive lawyers, and is politically influential. So Musk will do some weird thing, and people will go to the SEC being like “isn’t this illegal,” and the SEC will mutter “I mean we think so,” but if they actually bring a case about it it will cost a lot of time and money and be very grinding and unpleasant, and the legal arguments will be difficult and novel, and they might lose, and also everyone who works on the case will be blackballed from all the law firms that Elon Musk uses. It’s a mess.

But not bringing the case is also very unsatisfying: It sets bad precedents, undermines the SEC’s regulatory program, and leads to people like me going around saying “why on earth did Elon Musk get away with obviously violating the disclosure rules when he bought Twitter?” The SEC cannot solve the Elon Musk problem by ignoring him, because he keeps doing stuff.

Source: Tesla to Texas – Bloomberg