Warren sent the SEC a letter suggesting it investigate Musk, more than Twitter. She fabricates a thread of might be - could be speculation that Musk is somehow wrongly focused on Tesla with a conflicting interest per his owning Twitter now, as a private and not publicly traded company, while further speculating that Tesla's board is at fault.
This link reaches her letter to the SEC.
Nine pages with the only non speculative thing being that some key Tesla employees "voluntarily" assisted Musk in Twitter dealings. She suggests there may have been coercion and not clear vanilla voluntariness at play. No evidence offered, speculation entirely.
Warren seems to belittle if not fully ignore one explanation.That key Tesla employees may have felt a loyalty to Musk and a sense of gratitude toward him as the man who made Tesla a multi-billion dollar success paying them quite good salaries to where an incentive to help expedite the Twitter situation would fit volunteering to keep Musk's main focus upon Tesla, in their own best interest, as well as a cheerful willingness to help after all Musk had done building Tesla to what it is.
Excerpting key paragraphs from p.5 within the nine speculative pages (numbers being to letter footnotes):
Nasdaq rules require that a “majority of the board of directors must be comprised of Independent Directors,”25 meaning they must not be people who have a relationship which, “in the opinion of the Company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.”26 This important requirement exists so that shareholders can “have confidence that individuals serving as Independent Directors do not have a relationship with the listed Company that would impair their independence.”27 According to Nasdaq guidance, this obligation also gives the Tesla Board the “responsibility to make an affirmative determination that no such relationships exist.”28
The composition of Tesla’s eight-person Board29 raises concerns about whether it is in violation of the majority independent director requirement. As the founder and CEO of Tesla, Mr. Musk exercises significant control over the day-to-day management of the company, describing himself as a “nano-manager” who “can’t find people to delegate to,” most recently instituting a policy requiring that all Tesla hires be personally approved by him.30 As discussed above, Mr. Musk has regularly used Tesla resources for his other ventures, including SpaceX and Twitter, and may even be a controlling shareholder of Tesla.31 Tesla’s own 10-K filings admit the company is “highly dependent” on Mr. Musk and that he “spends significant time with Tesla and is highly active in [its] management.”32 Mr. Musk has stated he “handpick[ed]” Tesla’s Chair Robyn Denholm and bragged that he “can just call for a shareholder vote and get anything done that [he] want[s].”33 Given Mr. Musk’s control over Tesla, any close relationship between a Board member and Mr. Musk might constitute a “relationship with the listed Company that would impair [the member’s] independence.”34
So, Nasdaq says independence is in the judgment of a Board, and surely the Tesla lawyers and Board would have duly filed a required affirmation vote that the Board is/was/intends to continue to be independent.
Warren might not like those loose rules, but she cites them and they cut against her major contention of SEC misconduct. Then, Musk saying he can get a shareholder vote for anything, again it is the rule - shareholders are at law presumed to vote in their own best perceived economic interest, majority rules; and Musk held/holds the largest Tesla share vote as does Bezos at Amazon. Again Musk stated a fact. Warren might wish the law different, but it is as it stands. And calling it "bragging" to be truthful, CEO's are supposed to be truthful.
Musk subpoening Warren -
Elon Musk's X Corp. is serving a subpoena on Sen. Elizabeth Warren (D-Mass.), days after Warren urged the Securities and Exchange Commission to launch an investigation into Musk's dual role running Tesla and Twitter.
Musk's subpoena demands documents and communications related to Warren's letter to the SEC, as well as Warren's communications with the SEC and Federal Trade Commission. Musk is seeking documents going back to October 27, 2022, the day he completed his $44 billion purchase of Twitter.
Warren's July 17 letter urged the SEC to investigate Tesla "regarding the actions of its Board of Directors in managing the apparent conflicts of its Chief Executive Officer, Elon Musk." She wrote that Musk's actions while running Twitter and Tesla simultaneously "have raised concerns about conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders. Despite recent and repeated calls from investors to address these actions, the Board appears to have failed to uphold its legal duty to ensure that Mr. Musk act in the best interest of Tesla."
Although Twitter recently hired Linda Yaccarino as CEO, Warren said Musk appears likely to continue overseeing core functions of Twitter's business.
Today, Twitter successor company X Corp. notified a federal court that it "intends to serve a subpoena... on Senator Elizabeth Warren on July 20, 2023, or as soon thereafter as service may be effectuated."
Musk trying to block FTC probe
The subpoena was filed with US District Court for the Northern District of California as part of a case in which Musk is trying to terminate a privacy settlement that Twitter and the FTC agreed on last year before Musk bought the company. Musk is also trying to avoid an FTC deposition and wants the court to "rein in" the FTC's ongoing investigation into Twitter's privacy and data practices.
The subpoena of Warren demands "all documents relating to the SEC letter, including any drafts," and all communications relating to the letter sent or received by Warren since October 27.
Next, the subpoena asks for all communications between Warren or Warren's office with the FTC "between October 27, 2022 and the present relating to X Corp. or Elon Musk, and all documents relating to any such communications." The subpoena makes an identical request for all such communications with the SEC.
We contacted Warren's office about the subpoena today and will update this article if we get a response.
X Corp. last week claimed the FTC's investigation into Twitter is "tainted by bias" and that "the FTC's desire to depose Mr. Musk derives from the same bad faith and improper conduct that has characterized its investigation to date." The argument is similar to past claims by Tesla that the SEC "harass[ed]" Musk.
Warren’s call for SEC investigation
Musk will have some new headaches if the SEC heeds Warren's call for an investigation. Warren's letter said the "composition of Tesla's eight-person Board raises concerns about whether it is in violation" of a rule requiring that a "majority of the board of directors must be comprised of Independent Directors."
"Members of the Board with known ties to Mr. Musk or Tesla include Mr. Musk himself; Mr. Musk's brother, Kimball Musk; Ira Ehrenpreis, a 'longtime friend' of Mr. Musk who helped design his record-breaking compensation package and explored limiting the disclosure of its details to investors; James Murdoch, Mr. Musk's friend of almost 20 years who vacations with him; and J.B. Straubel, a former Tesla executive whose election to the Board in May of this year was opposed by both proxy advisory firm Glass Lewis and an investor group over concerns about Straubel's role as a 'company insider,'" Warren wrote.
Warren alleged that these "close relationships may explain the Board's persistent inability or unwillingness to address the concerns posed by Mr. Musk's actions." According to Warren, that includes the "possible misappropriation of Tesla resources by Mr. Musk's funneling of 'more than 50 of his trusted Tesla employees' to work on his Twitter takeover, including Tesla's Chief Information Officer and other senior staff."
Warren previously raised similar concerns in a December 2022 letter to Tesla Board Chair Robyn Denholm.
Warren surely is free to write any letter she wants, she did, and the public shall judge. She should not be allowed to escape a lawful subpoena in a pending federal action. She's not above the law. It will be damned interesting what she may disclose, presuming she holds nothing back but complies in good faith.
In parallel - with the opening video telling the story, (text following}.
No quote, watch the video, Musk has House support; it being part of how the entire thing is wrongly politicized with Musk deserving praise for fighting back every way he can against a clear likely coordinated power play against him.
Of final interest, one of Warren's footnotes is to a Musk Sixty Minutes interview.
He gives honest answers, and noteworthy, this part - not where Warren has or likely would focus - at the end of the interview:
GM also announced that it will double its investment into developing electric cars, and Elon Musk is celebrating.
Lesley Stahl: Why do you want the competition?
Elon Musk: The whole point of Tesla is to accelerate the advent of electric vehicles. And sustainable transport and trying to help the environment. We think it's the most serious problem that humanity faces. I'm not sure if you know it, but we open sourced our patents, so anyone who wants to use our patents can use 'em for free.
Lesley Stahl: Your patents are open-sourced?
Elon Musk: Yeah. If somebody comes and makes a better electric car than Tesla and it's so much better than ours that we can't sell our cars, and we go bankrupt, I still think that's a good thing for the world.
Lesley Stahl: And you'll sleep at night.
Elon Musk: Yeah, because somebody's making some pretty great cars. Um, yeah.
This is not a man with a rapacious (i.e. normal) capitalist attitude. We open source, we make the best, and if not we are history but the public would have a better electric auto if some other firm makes it.
This is Ayn Rand's John Galt's attitude. Personified in an actual person, not a fiction.
Why the stinking attack against that kind of person, where his politics are different from Warren and other Democrats? But his mind is right. It is counterproductive. Actions are available as a cudgel, but wrong.
Readers are urged as Crabgrass hopes to do - keep atop of this story, to see how the subpoena gets court attention and how Warren handles her response; and ultimately to see the machinations which might be revealed behind Warren's writing to Gensler, the head of the SEC, as she did, for whatever purposes.
Warren does not like Musk's Republican-leaning politics and this letter reeks of politicization as a motive for its drafting; for its wanting to instigate trouble for Musk via the SEC. Hence the subpoena response will be very important.