Tesla's SEC Deal Provides Ammunition For U.S. Probe, Investor Lawsuits – African News Network | Latest African News | Nigerian News | Breaking News
Connect with us

World News

Tesla’s SEC Deal Provides Ammunition For U.S. Probe, Investor Lawsuits

Published

on

Tesla's SEC Deal Provides Ammunition For U.S. Probe, Investor Lawsuits

Tesla Inc’s settlement with U.S. regulators will help soothe investors calling for more oversight of Chief Executive Elon Musk, experts said, even as it gives ammunition to short-sellers pursing separate cases and to a probe by the Justice Department.

Musk and Tesla will pay $20 million each, bring in two independent directors and have the billionaire step down as board chairman to settle U.S. Securities and Exchange Commission charges that Musk misled investors by tweeting he had financing for a go-private deal.

That settlement must still be approved by a court, and does not end the Justice Department probe disclosed by Tesla into Musk’s tweets or lawsuits by short-sellers and other investors alleging losses and securities law violations.

“The real worry for the company is not the SEC but private actions that follow a settlement like this,” said Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. “By paying that size fine, it bolsters investors’” claims over stock market losses, he said.

READ:  US-backed Syrian Forces Resume Assault Against ISIL Enclave

Neither Musk nor Tesla admitted or denied the SEC’s findings as part of the settlement.

Musk settled with the SEC after advisers persuaded him the terms were favorable and a lengthy court fight would not be in the best interest of the company, a person familiar with the deal said. Musk had wanted to personally pay the fine for money-losing Tesla but the SEC rejected that proposal, the person said.

Tesla shares plunged around 14 percent on Friday, the day after the SEC charged Musk with misleading investors, and are down 30 percent since his Aug. 7 tweet saying he was considering taking the company private at $420 a share.

READ:  Vietnam Sentences SA Man To Death For Drugs

Investor claims could result in substantial settlements in cash or equity, Elson said. An equity settlement could end up diluting Musk’s roughly 19 percent stake in Tesla, further reducing his influence on the board.

Still, Tesla shares could stabilize on Monday on investor relief that the penalties were not higher and that the public face of Tesla will remain in the CEO role under added oversight, analysts said.

Tesla is expected to release third-quarter production this week, and investors are watching to see if it hit targets for the Model 3, a high-volume car. Whether Tesla made a profit likely will not be known until it reports financial results for the quarter.

The settlement disclosed by the SEC on Saturday “is a positive outcome for Elon Musk, Tesla and ultimately shareholders,” wrote RBC Capital Markets analyst Joseph Spak, who added he expects Tesla shares to recoup some of their losses from last week.

READ:  U.S. Imposes Sanctions On Russia For Nerve Agent Attack In UK

An expanded board and new chairman offers hope “a true check on Elon will emerge and there will be greater accountability” over Musk’s statements and business targets, Spak added.

Tesla and Musk ended up accepting harsher penalties than the SEC originally proposed to settle the claims, according to the person familiar with the deal. The SEC initially was ready to accept a fine of a few million dollars and Musk’s removal as chairman for two years, but raised its demands after Musk balked at that offer, the person said.

World News

Israel Hits Targets Across Gaza After Rocket Attack

Published

on

By

Israel Hits Targets Across Gaza After Rocket Attack

Israeli forces have struck targets across the Gaza strip through Tuesday, including the offices of Hamas supreme leader, in response to a surprise rocket attack from the Palestinian territory.  The military has bolstered its troops and rocket-defense systems in anticipation of a new round of heavy fighting with the Islamic militant group.

READ:  US-backed Syrian Forces Resume Assault Against ISIL Enclave

Israel opened public bomb shelters in most major cities and civil defense authorities canceled sports events and public transportation in southern Israel.

Prime Minister Benjamin Netanyahu, who had hurried back to Israel from Washington because of the rocket attack, said Israel will not tolerate this, and that he, personally, would not tolerate it. He said Israel will respond forcefully to the rocket attack he called wanton aggression.

READ:  Worried Search For 993 Missing Persons After Deadliest California Wildfire

Israeli military said it had retaliated to the latest rocket attacks with fifteen airstrikes.  It also said Hamas military sites and those for smaller jihad group had been hit.

READ:  Majority Of Americans In Financial Woes Under Trump

Hamas has been leading weekly protests along the Israeli border for the past year in hopes of easing an Israeli-Egyptian blockade, but the demonstrations in which nearly two hundred persons have been killed by Israeli fire, have done little to improve conditions.

Continue Reading

World News

Theresa May Loses Control Of Brexit Negotiations, Parliament Takes Over

Published

on

By

Theresa May Loses Control Of Brexit Negotiations, Parliament Takes Over

British Prime Minister, Theresa May, could not be said to have had a good day on Tuesday as she lost control of the Brexit negotiations.  The Prime Minister says parliament’s decision to take control of the stalled process of leaving the European Union underscores the need for lawmakers to approve her twice-defeated deal.

READ:  Thailand's General Election To Hold In February 2019

The House of Commons voted on Monday to take control of the parliamentary timetable on Wednesday so lawmakers can vote on alternatives to the withdrawal agreement the prime minister negotiated with the EU.

READ:  Gunmen Attack Chinese Consulate In Pakistan's Karachi - Sources

Health secretary, Matt Hancock said on BBC news on Tuesday the government won’t “pre-commit” to accepting the option backed by lawmakers.  He wants lawmakers to support the prime minister’s agreement because, as he put it, the best way through the impasse is the one deal the prime minister has already negotiated with the EU.

READ:  Saudi Cuts Oil Output As OPEC Points To 2019 Surplus

Tuesday’s events are sure to further complicate the process of Britain leaving the bloc.

Continue Reading

African News

UN Says Around 1.85 Million People Affected By Cyclone In Mozambique

Published

on

By

UN Says Around 1.85 million People Affected By Cyclone In Mozambique

The United Nations’ humanitarian agency OCHA has on Tuesday disclosed that close to 1.85 million people have now been affected by Cyclone Idai and its aftermath in Mozambique alone.

“Some will be in critical, life threatening situations. Some will sadly have lost their livelihoods, which whilst an appalling tragedy is not immediately life threatening,” OCHA coordinator Sebastian Rhodes Stampa said.

READ:  U.S. Imposes Sanctions On Russia For Nerve Agent Attack In UK

Relief organizations, including the international federation of the red cross and red crescent societies, say some cases of cholera had already been reported. Meanwhile, in Zimbabwe the country’s entertainment stars have organized a concert to raise funds to help victims.  There is growing fear of starvation in communities that have been cut off by smashed bridges or destroyed roads.

READ:  Trump Administration To Oppose Chicago Police Reform Plan: Sessions

The United Nations is also making an emergency appeal for $282 million for the next three months to help Mozambique start recovering.

The UN funding will be used to provide water, sanitation, education and restoring the livelihoods of the hundreds of thousands of displaced people, UN humanitarian chief Mark Lowcock said Monday.

READ:  Trump Wants Pompeo To Study 'Killing Of Farmers' In South Africa

Continue Reading

Trending

Subscribe to ANN News Alert

Be the first to receive the latest news from Africa and around the world.

%d bloggers like this: