By Jacob Wolinsky. Originally published at ValueWalk.
1. In August of 2017, the company/Elon Musk promised 5000 model 3’s per week by December 2017 to help raise $1.8 billion in debt. Moody’s also rated the bond based upon this information. Eleven former employees are on the record stating that it was impossible, not improbable, to build cars in volume by then and they told that to Elon Musk. Therefore, he misrepresented material facts while raising capital. This violates securities laws.2. Elon Musk purchased shares in May and June of 2018 while promising “the short burn of the century”. He recently wrote that he was in discussions with the Saudi fund for many months, or over a year, to take the company private. This is a clear case of insider trading.3. The statements of “Funding Secured” and the subsequent statements were material and, by his own admission, untrue. There were no signed commitments, no Board approvals, etc. This violates the law as well.These three episodes, far from all inclusive, demonstrate a pattern of wilfully violating securities laws, the backbone of our financial system. In my opinion, the authorities cannot look the other way, no matter the success of the company or the nobelness of its goal.
I believe all of these are criminal offenses, though I am clearly not a lawyer. Martha Stewart, Richard Scrushy, Bernie Ebbers, etc. all had different but similar offenses and they all were charged criminally.
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