| ELIZABETH WARREN MASSACHUSETSCOMMITTEES: BANKING, HOUSES, AND URBAN AFFAIRS ARMED SERVICES FINANCE SPECIAL COMMITTEE ON AGING |
United States Senate | UNITED STATES SENATE WASHINGTON, DC 20510-2105 P: 202-224-45432400 JFK FEDERAL BUILDING 15 NEW SUDBURY STREET BOSTON, MA 02203 P: 617-565-31701500 MAIN STREET SUITE 406 SPRINGFIELD, MA 01103 P:413-788-2690www.warren.senate.gov |
July 17, 2023
The Honorable Gary Gensler
Chair
U.S. Securities and Exchange Commission
100 F Street NE
Washington, D.C. 20549
Dear Chair Gensler,
I am writing to request an investigation into Tesla, Inc., and the company’s U.S. Securities and Exchange Commission (SEC) disclosures regarding the actions of its Board of Directors (the “Board”) in managing the apparent conflicts of its Chief Executive Officer, Elon Musk. Mr. Musk’s actions since purchasing Twitter and becoming its Chief Executive Officer (CEO) – while remaining Tesla’s CEO – 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. The Board also does not appear to have adequately disclosed concerns about these issues to investors, undermining shareholders’ ability to make informed voting and investing decisions and to hold their fiduciaries accountable. The Board’s inaction and inadequate disclosures, and the close relationships of several Board members to Mr. Musk, raise questions about the effectiveness of their corporate governance and potential violations of securities laws.
Though Mr. Musk recently announced the hiring of Linda Yaccarino as the new CEO of Twitter, this does little to address the concerns to Tesla and its shareholders related to his dual role. Despite hiring Ms. Yaccarino, he is likely to retain “significant control” over the company[1] and intends to continue overseeing core functions of the business.[2] 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.
- ↑ CNN Business, “Elon Musk says he’s found a new CEO for Twitter,” Clare Duffy, May 12, 2023, https://www.cnn.com/2023/05/11/tech/elon-musk-twitter-ceo/index.html.
- ↑ Tweet from Elon Musk, May 11, 2023, https://twitter.com/elonmusk/status/1656748197308674048; Tweet from Elon Musk, May 12, 2023, https://twitter.com/elonmusk/status/1657050349608501249.
