"Reading the mind of Elon Musk is beyond my ability, but he is soon to join the SEC in front of a federal judge to defend the recent settlement agreement," said Stephen Diamond, an associate professor of law at Santa Clara University, who specializes in corporate governance. "If he doesn't want to put that deal at risk he ought to pay attention to cars instead of Twitter."
“I’m shocked,” Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, said of Musk’s attack on the agency. “It’s only inviting the SEC to rethink the settlement. And it’s going to make it much tougher to attract independent directors to join the board.”
U.S. District Judge Alison Nathan, who must approve the settlements Musk and Tesla agreed to with the SEC, gave both sides until Oct. 11 to explain why the agreements are fair and reasonable.
The SEC accused Musk in a lawsuit a week ago that he misled investors with his infamous Aug. 7 tweets about having the "funding secured" to take Tesla private. The company's shares tanked 14 percent the following day as the agency sought to ban Musk from serving as a company officer. After the settlement reached over the weekend, the shares surged 17 percent on Monday.
In court papers and at a news conference, the SEC went to great lengths to spell out Musk’s carelessness and erratic behavior, highlighting his threat earlier this year to “burn” investors betting against Tesla stock. The SEC also alleged that Musk rounded up the buyout price for Tesla to $420 a share to amuse his girlfriend at the time with a marijuana-culture reference.