As the CEO of a publicly traded company, there are a few things you should know from day one.
Brushing your teeth before a board meeting or other meeting is one of them.
It's okay to wear a suit, but it's not an insult to help.
Another prerequisite: If you are interested in acquiring another company, you need to follow some simple rules.
If one accumulates more than 5% of the target's shares, a lawyer with minimal competency sufficient to instruct them to file some documents with the government in a timely manner (within 10 days) It's about consulting.
Yes, it's about CEO 101.
But the richest man in the world, the CEO of electric car manufacturer Tesla, a very smart man who flies rockets into space named Elon Musk, somehow managed to get that memo as a recent enforcement action by the Securities and Exchange Commission. I did not receive it.
When Musk began accumulating shares in Twitter in preparation for taking the social media platform private and renaming it to “X” in 2022, he seemed unaware of basic disclosure rules. . If Musk forgets to file for any reason, please contact his attorney, Alex Spiro.
Crickets.
The SEC's charges shocked Wall Street and were painted as another attempt by greedy fat cats to game the system.
Even if true, it may not be the greatest “crime” committed as part of this bizarre story.
Musk, like his new boss and friend Donald Trump, can make a good case that he is the victim of legal action. Mr. Musk's greatest sin is to become a political enemy of the ruling party.
Serious problems that need to be ended quickly can quickly overwhelm the legal system.
Remember, not disclosing stock ownership when stocks meet SEC standards is actually quite common. Because investors who don't make a living doing acquisitions (that would be Mr. Musk) aren't always trained in the basics, even if they should be. Get used to it.
Looks like it's not Ponzi
Plus, we're not talking about something as serious as a pyramid scheme here.
The worst-case interpretation is that investors tricked the system into buying the stock for a little less than the price rise fueled by takeover buzz at the time of the disclosure.
As a result, millions of dollars in fines are levied and often settled without the target admitting or denying wrongdoing.
It's a big change for Musk, who is worth more than $400 billion.
But this isn't about crime or money.
Many legal sources I spoke to say it's about the publicity and distraction it creates.
The enforcement action took place last Tuesday night, just days before Sleepy Joe Biden and his SEC Chairman Gary Gensler are set to leave office on January 20th.
Gensler has clashed with Musk in the past over Tesla-related issues.
But my sources say the SEC (who declined to comment) continued to effectively suppress the evidence until the final moments of the Biden administration.
Remember: News first broke that Musk had bought about 9% of Twitter on April 4, 2022, the day Musk first went public.
He reached the 5% threshold much earlier, in March, according to the SEC.
He filed his disclosure late, after he had been secretly accumulating stock without the market's knowledge.
The SEC also said Musk's disputed deposition delayed the prosecution.
OK, not a great move, but going back to when Musk bought the stock and when he hit 5% is not a high-level crackdown.
The SEC stock tracking system is 100% transparent.
So why now?
That means the SEC could have filed charges almost immediately after Musk announced his intention to make Twitter private, with or without a deposition.
As one longtime securities lawyer and former SEC official puts it: So why bring it now? ”
Amid a flurry of pardons, executive orders aimed at thwarting Trump's policies, and constant attempts to imprison him for misdemeanors in recent years, a barely sentient president prepares to leave office. The answer is obvious to anyone who has seen it happen.
Legislative efforts against Trump failed, and he is now president. So Biden, or whoever is pulling the strings in the White House these days, is changing tactics.
The goal now is to embarrass and distract Trump and thwart his mission, which includes reversing nearly everything Sleepy Joe has done over the past four years of unstable governance.
As reported, Mr. Musk will be at the center of dismantling the Biden mix.
He will lead the Trump administration's Office of Government Efficiency, known as DOGE, where he and entrepreneur Vivek Ramaswamy vow to dismantle the vast progressive administrative state.
Nothing distracts Musk more than civil fraud cases.
The charges include President Trump's new SEC chairman, Paul Atkins, and the enforcement staff who investigate the matter if Atkins raises such issues and seeks to have them dismissed or slapped on the wrist. It also has the added benefit of driving a wedge between
Yes, I know, masks are not blameless here.
One interesting explanation of Musk's role comes from a banker familiar with Tesla's top leadership.
“He is not a traditional CEO in that he consults with lawyers and reads the balance sheet before making any big decisions,” the person said.
“He's working on his grit and his impulsiveness.”
I'll always take Musk's impulsiveness toward memorial services.
