Democratic Senator Elizabeth Warren from Massachusetts is on the warpath against Elon Musk.
On Monday, she sent a letter to the Securities and Exchange Commission, pressing the agency to investigate Tesla – Musk’s electric car company – about how it might have been involved in his takeover of social media company Twitter.
In her letter, Warren demands that an investigation be conducted into the car company as well as its board of directors for potential “conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders.”
The senator is concerned there may have been wrongdoing revolving around Musk purchasing Twitter back in October and running the social media company. She alleged that Musk having a hands-on role at the social media company could adversely affect the shareholders of Tesla, despite the fact that he stepped aside as Twitter’s CEO recently.
In her letter, Warren wrote:
“As the owner of Twitter, Mr. Musk could decide to run the company to maximize badly-needed revenue, even if that includes great deals for Tesla’s competitors and potential injury to Tesla. Musk could run Twitter to benefit Tesla through favorable algorithms or free advertising.”
Warren also cited recent reporting that said that Musk rounded up more than 50 employees from Tesla to work on the acquisition of Twitter. As she wrote:
“This use of Tesla employees raised obvious questions about whether Mr. Musk appropriated resources from a publicly traded firm, Tesla, to benefit his own private company, Twitter.”
Tesla has to have an independent board of directors whose job it is to represent investors and shareholders, since it is a public company. Warren’s letter, though, claims that this board might not be completely independent. She alleges this based on the fact that Musk has appointed his brother Kimball to the board, as well as many of his other close friends.
Even though Linda Yaccarino, a former advertising executive with NBCUniversal, has taken over as CEO of Twitter, that move was insufficient “to address the concerns to Tesla and its shareholders related to [Musk’s] dual role,” according to Warren’s letter.
The letter continued:
“Should Mr. Musk change his mind about stepping down as CEO, there is nothing to stop him from firing Ms. Yaccarino and returning to the helm.”
Musk has taken a lot of heat from a lot of different people over a lot of different angles of his takeover of Twitter. Some people are concerned about how he has ostracized users and, as a result, advertisers with some of his moves to try to improve the company’s revenue.
Others are concerned about some of his moves intended to boost free speech, such as reinstating former President Donald Trump to the platform.
But, Warren’s concerns center on the relationship between Twitter and Tesla, and how Musk may be using the two to benefit each other. It certainly sounds like she has it out for Musk, but if the SEC were to find any wrongdoing, it would not be a good thing for Musk or for Tesla – as a publicly-traded and regulated company.
