Who Is the Lawyer Pre-Reading Elon Musk's Tweets?
Elon Musk's tweets related to Tesla finances must now be preapproved by "an experienced securities lawyer employed by the company," according to an SEC agreement. Tesla's top securities lawyer left in November, and it's not clear if he's been replaced or who will take on the role as Musk's Twitter gatekeeper.
May 01, 2019 at 12:47 PM
3 minute read
Elon Musk's latest agreement with the U.S. Securities and Exchange Commission requires the chief executive officer get preapproval from securities counsel before tweeting about Tesla Inc. finances, but it's not yet clear who that lawyer is or if he or she has been selected.
The agreement resolves SEC allegations that Musk breached an October 2018 settlement with the agency in February by tweeting inaccurate 2019 Tesla sales production estimates without running the post past his general counsel. His latest SEC deal, filed April 26 in the Southern District of New York, calls for “an experienced securities lawyer employed by the company” to preapprove Musk's Tesla finance-related written communications, including tweets.
But Tesla's top in-house securities lawyer, vice president of legal Philip Rothenberg, left the Palo Alto, California-based company last year for a general counsel gig. A Tesla representative declined to comment on whether the company has since hired another experienced securities lawyer. There are no Tesla legal vice presidents with extensive securities law experience listed on LinkedIn. Tesla's careers page has no posts seeking in-house U.S. securities lawyers.
The company's representative also declined to identify the securities counsel assigned to preapprove Musk's tweets. A source familiar with the agreement said Tesla may not have named a lawyer yet. Steven Farina, the co-chair of Williams & Connolly's accounting malpractice and securities litigation and enforcement practice groups who represented Musk in previous SEC agreements, did not respond to a request for comment on whether he'd been selected.
In December, the role of preapproving Musk's tweets was assigned to Tesla's general counsel, then Dane Butswinkas. Musk was originally ordered to follow Tesla oversight on written communications in an October SEC settlement over tweets incorrectly claiming that he'd secured funding to take the company private at $420 a share.
Butswinkas left Tesla, allegedly over a cultural mismatch, the day after Musk's February tweet claiming Tesla would “make around 500k [cars] in 2019.” Musk clarified four hours later Tesla would likely produce 10,000 cars a week and complete 400,000 deliveries this year, prompting action from the SEC.
Tesla announced its longtime in-house counsel Jonathan Chang as general counsel the same day as Butswinkas' return to Williams & Connolly. Chang “met and conferred” with SEC lawyers and Musk to reach the latest agreement, but he's not listed as the go-to approval for Tesla finance tweets from the CEO.
He led Tesla's securities team among other legal functions in his previous role as vice president of legal, but, according to his LinkedIn profile and information provided by the company upon his promotion to GC, does not have experience as securities outside counsel or at the SEC. The SEC did not provide a clear definition of ”an experienced securities lawyer employed by the company” following a request Tuesday.
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