After the settlement of the SEC, who will examine the tweets of Elon Musk?

Many important and competent people have already weighed in on the settlement between Elon Musk and the SEC: what does this mean for shareholder lawsuits, what does this mean for the DOJ investigation, whether or not it a good regulation.

I would like to talk about Twitter dot com. I live for that.

The SEC's complaint to Musk is widespread on Twitter, and I have repeatedly suggested that Musk was a lesson for us on social media: never post tweets. (I will never learn this lesson, and probably not more than Musk.) Whatever it is, according to the original complaint:

On Tuesday, August 7, 2018, Musk released a series of statements regarding a transaction to privatize Tesla with the help of his personal Twitter account. Musk did not consult Tesla's board of directors, other Tesla employees, or any outside advisors about these tweets before publishing them.

It's really not a surprise, but it's East deeply unusual. Most CEOs have around them a huge and largely invisible device to prevent all that is horrible from happening. According to Evelyn Cruz Sroufe, partner at Perkins Coie, head of corporate law, they engage in carefully controlled speeches. Even minor appearances are often controlled by legal or public relations. Anything that a CEO means that is likely to generate news or be of importance to the company is usually shared with the board of directors or a representative of the board of directors; Investor relations are usually involved as well, she says.

This assumes that CEOs write the tweets themselves; For the most part, they do not, says David Moyer, president of the executive recruitment firm Moyer, Sherwood Associates. (The company specializes in communications and investor relations.) For example, if I'm the CEO of Ride the Lightning, a company that makes mountain bikes for backpacks, I'm probably not tweeting from my "personal" account. Instead, someone in the communications department writes the tweet, someone from the legal field reviews it and then, as CEO, I approve it. I do not write it myself! I am a busy and important CEO!

Tweet CEOs are less unusual in Silicon Valley culture and technology in general. Most CEOs do not send as many tweets, and those who send themselves have usually a working knowledge of SEC regulations – at least they know enough to say nothing about material in a tweet. But Musk's use on Twitter "is quite unusual because of the volume of things he publishes," says Sroufe, "and the ungoverned nature of what comes out." Moyer says more frankly: "He is all id".

The SEC is not the only action that Musk has faced as a result of his unfiltered use of Twitter. Leaving aside the Department of Justice's investigation on the same tweet, there is also the defamation lawsuit brought by Vernon Unsworth, the caveman explorer Musk, referred to as "pedo", and a National Labor Relations Board complaint about anti-union tweets. These are expensive tweets! Even if Musk wins everything against him, he still has to pay $ 20 million to the SEC, not to mention the cost of his lawyers. And while lawyers – I love you, sophists! – are full of entertaining zingers, these zingers are expensive.

So, musk could welcome Twitter intervention! In any event, the SEC requires Tesla to "put in place additional controls and procedures to oversee Musk's communications." Ahhhh. the screaming person "LOG OFF" at Musk is the SEC. (Of course, the settlement could change, as a judge is investigating – stay tuned for next week, when the SEC and Musk will have to write a letter to justify it!

But the SEC's requirement that someone watch his tweets does not work if Musk does not approve of it. And we do not know how Tesla plans to handle this. Spokesman Dave Arnold said the company "has nothing left to share at this point".

I hope you enjoy speculation because I am about to speculate on how this might happen. While musk could hire a factotum to manage his Twitter account – the one whose job it is to tweet normal stuff (?) such as Naughty By Nature videos, but check any Tesla stuff with the board – and never again look at Twitter, this seems unlikely. With no physical insertion of a human between Musk's thumbs and the Twitter mobile app, Tesla will have to rely on Musk's judgment to control his more spicy tweets.

Who would look at the hot catches of Musk Tesla? It could be an independent board member or more than one. A board of independent board members would be a natural fit where Musk could check his tweets, Sroufe told me. This is the most flexible way to handle this: having an independent, well-judged person who checks tweets before they leave. "If he is willing to do that is a real open question," says Sroufe.

If this is not the case, we do not know what will happen next because the type of formal process that the council can impose is unclear. "The ideal way is to get back to your Twitter account and see everything again, but I do not think you'll get there with him," says Sroufe.

One person, an architect of a public corporation for a large technology company that you have certainly heard of, expressed his skepticism that Musk would be able to stick to the terms of the law. agreement with the SEC – at least regarding its use of Twitter. Musk does not want to listen, said the person. Moyer agrees: sooner or later, Musk will ruin everything, he says.

So … what happens next? This is not clear either, even though Musk's twitches on Twitter this year have so far cost Tesla shareholders $ 20 million (plus legal fees). This may mean that the actual enforcement mechanism will end up being shareholder lawsuits. Musk's tweets are a matter of accountability and oversight by the board, says Sroufe. If the board can not put in place a process to control fuego tweets, it is unlikely that shareholders are reluctant to sue. And because Musc has been specifically admonished by the SEC regarding the nature of its Twitter habit, it may be easier for these shareholders to make their case. The last thing any Twitter user wants is to be accosted by his followers.

Listen, it's probably better for Tesla if Musk tweets less – honestly, the best case is that he removes his account – but it's worse for me, personally. I love Musk's tweets! I like even the bad ones! I am not necessarily love that I have to give up what I do (usually editing less time-sensitive things) to report or edit reports on Musk's tweets, but I would be lying if I said I do not have a report. The only people who do not do nonsense on Twitter are not.

Anyway, the presence of Musk on Twitter has been educational for me this week! I asked myself years who could perhaps use the Apple Stocks application, which I have never opened. It turns out that the answer is Elon Musk.

With report by Nilay Patel.