U.S. Sen. Elizabeth Warren, D-MA, sent a letter encouraging the Securities and Exchange Commission (SEC) to investigate Tesla and its Board of Directors. The official’s letter cited possible “conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders” related to CEO Elon Musk’s acquisition of social media platform Twitter.
Warren’s nine-page letter, sent to SEC Chair Gary Gensler on July 17, mentioned the Tesla board’s “apparent lack of independence” from the CEO. It also cited “inaction and incomplete disclosures,” as well as “questions about possible violations of securities laws and exchange rules which fall under SEC’s jurisdiction.”
When Musk took over Twitter last year, he implemented a number of changes to the social media platform. These included cutting off a large portion of Twitter’s headcount, as well as the rapid rollout of new features. Musk also brought over workers from his other companies to help the social media platform function with a much more optimized workforce.
Warren wrote “possible violations of state and federal labor law” might have happened when Musk brought over Tesla employees to temporarily work on Twitter. She also argued the Tesla board had not informed shareholders about how the EV maker and Twitter have worked together, or how they may work together, as noted in a CNBC report.
Despite advertising veteran Linda Yaccarino being appointed as Twitter’s new CEO, Warren noted in her letter that Musk is still left in charge of the social media platform. Musk still serves as Twitter’s CTO and executive chairman.
“Despite hiring Ms. Yaccarino, he is likely to retain ‘significant control’ over the company and intends to continue overseeing core functions of the business. Given the concerns about the actions by Mr. Musk and the Board, I ask that the SEC conduct a review to determine if they have complied with relevant securities laws,” Warren wrote.
The senator also reiterated concerns raised in an earlier communication with Tesla Chair Robyn Denholm last December. A spokesperson from the SEC’s Office of Public Affairs said Gensler will “respond to members of Congress directly.”