Elon Musk cheers Justice Department investigation into short sellers

Elon Musk gestures as he speaks during a press conference at SpaceX’s Starbase facility near Boca Chica Village in South Texas on February 10, 2022.

Jim Watson | AFP | beautiful pictures

Tesla CEO Elon Musk told CNBC he is pleased to see the Justice Department is investigating short sellers, who have long been targets of billionaires. He also had a new shoot at the Securities and Exchange Commission, one of his regular targets.

“I’m very encouraged by the Department of Justice investigating short sellers,” Musk told CNBC in an email Tuesday. “This is what the SEC was supposed to do, but oddly enough, it didn’t.”

The Justice Department is said to be investigating two investors who had previously short sold Tesla shares. Meanwhile, the SEC has been scrutinizing Tesla, which has led to an intense legal battle between the company and the regulator.

Musk has made public his aversion to the SEC, at times insulting the regulator. In 2018he calls the agency “shortsman’s enrichment commission”. Almost two years laterhe did profanity digging at the SEC.

SEC recently submit a letter to a federal judge responding to Musk’s previous allegations that the SEC “broken its promise” and engaged in a “pattern of conduct” that led to harassment following a pre-settlement settlement there. The SEC has accuse Musk of cheating in 2018.

Reuters report that the SEC is looking into whether Tesla failed to properly notify shareholders and the public of the complaint, which focuses on fire risks associated with the company’s solar panel system.

The SEC declined to comment.

Musk also aims to invest in companies that rely on short selling.

“Typically, sophisticated hedge funds have used short selling and sophisticated derivatives to take advantage of small investors. They would short a company, conduct a negative publicity campaign. to push the stock price down temporarily and cash it out, then do it again and again.. The term for this, as you probably know, is “short and distorted,” Musk said.

In 2020, Tesla is famous skewers short seller by selling “Short Shorts” in red satin. Musk also sent a box of shorts to Tesla investor and short seller David Einhorn in 2018.

Musk is famous for moving the market on his own, regularly tweeting, prompting investors to call for more regulatory involvement. Critics have called him a market manipulator.

The Tesla and SpaceX CEO’s comments came in the same email exchange in which he also spoke out. around his ongoing stalemate with the administration of President Joe Biden.

DOJ poll, according to The The Wall Street Journal, is focusing on alleged cases of so-called “spoofing” and “scaling”. Scams involving the illegal use of fake orders to pump or devalue a stock during rate adjustment are when active investors close their positions without disclosing the move.

Muddy Waters Research founder Carson Block, a vocal critic of Musk’s short selling of Tesla stock, is believed to be among investors who were served search warrants by federal investigators during the investigation. Check short sellers.

“I have said for several years that it is important for all stakeholders in the ecosystem to develop sophisticated data analytics capabilities to detect transactions,” Block said in a statement to the Journal. There is a problem. It is very dangerous to outsource these analyzes to non-practices.” “

The New York Times last year reported that Block was turning to short the electric-car giant. In one alphabet As the Times obtained, Block explained his decision to allies by saying that “the market cap, the spotlight, Elon’s élan, is still there.”

Andrew Left, a former Tesla employee, had his computer seized by federal agents, according to Bloomberg. The rest say in Year 2020 that he is shorting the company’s stock.

Musk’s battle with short sellers isn’t just about supporting his company. He spoke out against short selling during the GameStop stock frenzy last year, when large groups of retail investors took to Reddit. sent the stock up 1,500% in two weeks.

“you can’t sell a house you don’t own you can’t sell a car you don’t own but you *can* sell stock you don’t own!? Here’s bs – short selling is a legitimate scam just for the sake of reason vestibule,” Musk said in one tweet in January 2021.

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