"Twitter Acquisition, Conflict of Interest" US Warren Urges SEC to Investigate Tesla

Elizabeth Warren, a prominent U.S. Democratic federal senator, sent a letter to the U.S. Securities and Exchange Commission (SEC) urging an investigation into Tesla regarding Elon Musk's acquisition of Twitter.

[Image source=Reuters Yonhap News]

According to the economic media CNBC on the 17th (local time), Senator Warren stated in a letter to SEC Chairman Gary Gensler, "Elon Musk, CEO of Tesla, acquiring Twitter and becoming Twitter's CEO raises concerns about conflicts of interest, misuse of corporate assets, and potential negative impacts on Tesla shareholders."

In the 9-page letter, Senator Warren pointed out that despite repeated requests from investors to address these issues, Tesla's board of directors has failed to properly disclose relevant information and has not fulfilled its legal obligations. She also cited the board's lack of countermeasures, inadequate disclosures, and close relationships between some board members and CEO Musk as problems, raising concerns about corporate governance deterioration and possible violations of securities laws. This largely mirrors the concerns Warren expressed in a letter sent to Tesla's board chairman last December.

Specifically, Senator Warren noted that although CEO Musk recently announced the hiring of Linda Yaccarino, a former NBCUniversal executive, as Twitter's new CEO, it has not alleviated Tesla investors' concerns. Musk still maintains "significant control" over Twitter and oversees its core business. Warren argued, "It is necessary to verify whether Musk and Tesla's board have complied with relevant securities laws."

Additionally, Senator Warren expressed concerns that CEO Musk, while operating Twitter, might engage in transactions that could potentially harm Tesla to maximize Twitter's revenue, or conversely, manipulate Twitter's algorithms or provide free advertising to benefit Tesla.

She also mentioned that when Musk acquired Twitter last year, he took on $13 billion in debt and sold billions of dollars worth of Tesla shares to finance the acquisition, which caused Tesla's stock price to drop. Furthermore, citing recent reports of Tesla employees being transferred to Twitter, she raised the possibility of violations of 'state and federal labor laws.'

The SEC stated that Chairman Gensler plans to respond directly to the senator regarding Warren's letter. Tesla did not respond to CNBC's request for comment. Tesla is scheduled to announce its second-quarter earnings after the market closes on the 19th.

This content was produced with the assistance of AI translation services.