Tesla CEO Elon Musk has amassed immense power for business driving as a result of his cults, but vague laws make it difficult for regulators to intervene.
The famous CEO, who has over 54 million followers on Twitter and a dedicated Reddit, whips the cryptocurrency market and sent several stocks up this year with a series of tweets and corporate updates.
This week was all about power. Musk’s tweet on Wednesday announcing that Tesla will no longer welcome Bitcoin payments sent down 17 percent cryptocurrency, boiling down and weighing down the sector’s bitcoin future.
This week, Dogecoin took a more wild ride, first plummeting after Musk referred to it as a “hustle” on the American television show “Saturday Night Live.” Musk later revealed that SpaceX’s commercial missile would accept it as payment. Musk announced on Thursday that it was working on improving cryptocurrency start-up transactions.
Although consumer advocates contended that Musk was harming investors and mocking public markets, it was unclear if he simply wielded his power in a way that violated the law.
“The issue here is that a loose cannon boss often fires his mouth at a wide variety of economic activities,” said Dennis Kelleher, CEO of Better Markets Think Tank. “Obviously, it’s risky, but it may not be illegal.”
A message left with Tesla’s spokesperson went unanswered.
Musk’s latest tweets about dogecoin sparked a boom in the digital currency, which began as a social media joke. According to CoinMarketCap.com, Dogecoin, which was practically worthless by the end of 2020, has risen to become the fourth-largest cryptocurrency by market value.
Additional tweets about retailer Etsy GameStop and the online marketplace continued to boost their shares this year, although investors purchased incorrect shares in the Signal Advance gadget manufacturer, assuming it was the trading ticker for Musk’s sponsored chat app Signal.
As a result, lawyers have argued that Musk would be breaking the law if he moved an asset price to enrich himself or others around him, or if he used intelligence inside him. Reuters was unable to determine Musk’s asset holdings.
For others, Musk represents big investors such as Warren Buffett and Ray Dalio, who dominated markets long before Musk. Furthermore, Musk’s use of social media to reach out to people directly may have muddied the legal waters in his favor.
“Previously, access to these delegates was limited due to personnel and press releases. It is now up to the general public to interpret this knowledge directly “Kelley Kronenberg’s technology-focused associate, Timothy Shields, said.
“It is extremely difficult for regulators to classify and control instances where Musk’s speech is clearly anti-Tesla.”
The Commodity Futures Trading Commission, which regulates Bitcoin derivatives, did not respond to comment requests. The Securities and Exchange Commission (SEC) and the United States exchange “watch suspicious behaviour through controlled markets,” according to an SEC spokesperson.
SECURITIES OF SETTLEMENT
Musk has previously crossed the border. In August 2018, he tweeted that despite not being close to him, he had “secured funding” to take Tesla private.
The SEC fined Musk $20 million for securities fraud, and Tesla was fined $20 million for insufficient details and checks on Musk’s Twitter. The SEC also directed Tesla to investigate all public content communications made by Musk about Tesla.
However, the SEC stated months later that Musk breached Tesla’s development outlook with an unvetted tweet. According to the indictment, Musk’s attorneys argued that the tweet was not material, as stated by Reuters: https://www.reuters.com/articles/us-tesla-mosk-sec/musks-lawyers-call-tweet-in-secs-contempt-bid-not-material-idUSKCN1R32SF.
The SEC tightened Tesla’s settlement by explaining a variety of topics that Musk was not permitted to address without permission.
Tesla’s Wednesday tweet, according to attorneys, was carefully planned and did not appear to violate the contract.
According to Philip Moustakis of the law firm Seward & Kissel, Musk and Tesla could be in hot water if the assertion was false or deceptive, such as if Tesla sold bitcoin prior to the announcement. “I wouldn’t be shocked,” he said. He said. (In the first paragraph, the spelling of Tesla was changed.)
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