Skip to main content

After the SEC settlement, who will review Elon Musk’s tweets?

After the SEC settlement, who will review Elon Musk’s tweets?

/

I will never log off. And neither will Elon.

Share this story

Premiere Of ‘Do You Trust This Computer?’ - Q&A
Photo by Alberto E. Rodriguez/Getty Images

Plenty of important and knowledgeable people have already weighed in on Elon Musk’s settlement with the SEC: what it means for the shareholder lawsuits, what it means for the DOJ investigation, whether it’s a good settlement.

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

Musk’s Twitter use figures heavily in the SEC complaint, and I have repeatedly suggested that Musk is an object lesson for the rest of us about social media: never tweet. (I will never learn this lesson, and probably neither will Musk.) Anyway, from the original complaint:

On Tuesday, August 7, 2018, Musk published a series of statements about a transaction to take Tesla private using his personal Twitter account.  Musk did not consult with Tesla’s Board of Directors, any other Tesla employees, or any outside advisors about these tweets before publishing them.  

This Week in Elon

This Week in Elon is a limited-run newsletter that is occasionally revived when there’s Too Much News. And right there, this is Too Much News. You can subscribe here.

This is honestly not much of a surprise, but it is profoundly unusual. Most CEOs have a huge and mostly invisible apparatus around them to prevent anything horrible from happening. They engage in carefully controlled speech, and even minor appearances are often vetted by legal or public relations, often both, says Evelyn Cruz Sroufe, a partner at Perkins Coie who handles corporate law. Anything a CEO wants to say that’s either likely to generate news or be material to the company is typically aired with the board or a representative of the board; investor relations is typically also involved, she says.

This is assuming the CEOs write the tweets themselves; mostly, they don’t, says David Moyer, the president of executive search firm Moyer, Sherwood Associates. (The firm specializes in communications and investor relations.) For example, if I’m CEO of Ride the Lightning, a company that makes mountain bikes for dirtbags, I am likely not tweeting from my own “personal” account. Instead, someone in the communication department drafts the tweet, someone in legal looks it over, and then I, as CEO, approve it. I don’t write it myself! I am a busy and important dirtbag CEO!

“He’s all id.”

Tweeting CEOs are less unusual in Silicon Valley culture and in the tech space, generally. Most CEOs don’t tweet that much, and the ones who tweet themselves do generally have a working knowledge of SEC regulations — at least, they know enough to avoid saying anything material in a tweet. But Musk’s Twitter use “is pretty unusual because of the volume of stuff he puts out,” Sroufe says, “and the ungoverned nature of what comes out.” Moyer puts it more bluntly: “He’s all id.”

The SEC isn’t the only action Musk has faced as a result of his unfiltered Twitter use. Leaving aside the Justice Department probe into that exact same tweet, there’s also the defamation suit filed by Vernon Unsworth, the cave explorer Musk referred to as a “pedo,” and a complaint from the National Labor Relations Board about anti-union tweets. These are some expensive tweets! Even if Musk wins everything coming at him, he still has to pay $20 million to the SEC plus whatever his lawyers cost. And while lawyers — I love you, you sophists! — are full of entertaining zingers, those zingers are expensive.

So, Musk might welcome some Twitter intervention! In any event, the SEC is demanding that Tesla “put in place additional controls and procedures to oversee Musk’s communications.” Ahhhh. The person screaming “LOG OFF” at Musk’s house is the SEC. (Of course, the settlement might change, as a judge is inquiring about it. Stay tuned for next week, when the SEC and Musk have to put a letter together to justify it!)

But the SEC requirement that someone oversee his tweets doesn’t work if Musk doesn’t go along with it. And it’s not clear how Tesla plans to manage this. Spokesman Dave Arnold told me that the company doesn’t “have anything further to share at this point.”

I hope you enjoy speculation, because I am about to speculate about how this could go. While Musk could hire a factotum to handle his Twitter account — one whose entire job is to tweet normal (?) stuff like Naughty By Nature videos, but vet any Tesla stuff with the board — and never look at Twitter again, that seems unlikely. In the absence of physically inserting a human between Musk’s thumbs and the mobile Twitter app, Tesla will have to rely on Musk’s judgment when it comes to vetting his spicier tweets.

Who would review Musk’s Tesla hot takes?

Who would review Musk’s Tesla hot takes? It could be an independent board member or more than one. A committee of independent board members would be a natural choice where Musk could check his tweets, Sroufe tells me. That’s the most flexible way to handle it: to have some independent person with good judgment vetting the tweets before they go live. “Whether he’s willing to do that is a real open question,” Sroufe says.

If he isn’t, it’s not clear what happens next because it’s not clear what kind of formal process the board can impose. “The ideal way is that they take over his Twitter account and review everything, but I just don’t think you’re going to get there with him,” Sroufe says.

One person, an architect of a CEO-public-persona-apparatus for a large tech company you have certainly have heard of, expressed skepticism that Musk would be able to stick to the terms of the SEC deal — at least when it comes to his Twitter use. Musk won’t listen, the person said. Moyer agrees: sooner or later, Musk is going to screw up, he says.

So… what happens then? That part isn’t clear either, even though Musk’s Twitter kerfuffles this year have, so far, cost Tesla shareholders $20 million (plus lawyers’ fees). That may mean the actual enforcement mechanism will end up being shareholder lawsuits. Musk’s tweets are a liability issue as well as a board oversight issue, Sroufe says. If the board cannot set up a process to control the fuego tweets, shareholders are unlikely to be shy about suing. And because Musk has been specifically admonished by the SEC regarding the nature of his Twitter habit, it may be easier for those shareholders to make their cases. The last thing any Twitter user wants is to be accosted by one’s followers.

Look, it’s probably better for Tesla if Musk tweets less — honestly the best-case scenario is for him to delete his account — but it’s worse for me, personally. I like Musk’s tweets! I even like the bad ones! I don’t necessarily love that I have to drop whatever I’m doing (usually editing stuff that’s way less time-sensitive) to report or edit reports on Musk’s tweets, but I’d be lying if I said I didn’t relate. The only people who don’t do dumb shit on Twitter aren’t on Twitter.

Anyway, Musk’s Twitter presence has been educational for me — even just this week! I’ve wondered for years who could possibly use the Apple Stocks app, which I have never once opened. It turns out, the answer is Elon Musk.

With reporting by Nilay Patel.

This Week in Elon /

We keep track of Elon Musk so you don’t have to.

Subscribe!

Today’s Storystream

Feed refreshed Sep 25 Not just you

E
Twitter
Emma RothSep 25
Rihanna’s headlining the Super Bowl Halftime Show.

Apple Music’s set to sponsor the Halftime Show next February, and it’s starting out strong with a performance from Rihanna. I honestly can’t remember which company sponsored the Halftime Show before Pepsi, so it’ll be nice to see how Apple handles the show for Super Bowl LVII.


E
Twitter
Emma RothSep 25
Starlink is growing.

The Elon Musk-owned satellite internet service, which covers all seven continents including Antarctica, has now made over 1 million user terminals. Musk has big plans for the service, which he hopes to expand to cruise ships, planes, and even school buses.

Musk recently said he’ll sidestep sanctions to activate the service in Iran, where the government put restrictions on communications due to mass protests. He followed through on his promise to bring Starlink to Ukraine at the start of Russia’s invasion, so we’ll have to wait and see if he manages to bring the service to Iran as well.


E
External Link
Emma RothSep 25
We might not get another Apple event this year.

While Apple was initially expected to hold an event to launch its rumored M2-equipped Macs and iPads in October, Bloomberg’s Mark Gurman predicts Apple will announce its new devices in a series of press releases, website updates, and media briefings instead.

I know that it probably takes a lot of work to put these polished events together, but if Apple does pass on it this year, I will kind of miss vibing to the livestream’s music and seeing all the new products get presented.


E
External Link
Emma RothSep 24
California Governor Gavin Newsom vetoes the state’s “BitLicense” law.

The bill, called the Digital Financial Assets Law, would establish a regulatory framework for companies that transact with cryptocurrency in the state, similar to New York’s BitLicense system. In a statement, Newsom says it’s “premature to lock a licensing structure” and that implementing such a program is a “costly undertaking:”

A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases, and is tailored with the proper tools to address trends and mitigate consumer harm.


Welcome to the new Verge

Revolutionizing the media with blog posts

Nilay PatelSep 13
A
Youtube
Andrew WebsterSep 24
Look at this Thing.

At its Tudum event today, Netflix showed off a new clip from the Tim Burton series Wednesday, which focused on a very important character: the sentient hand known as Thing. The full series starts streaming on November 23rd.


A
The Verge
Andrew WebsterSep 24
Get ready for some Netflix news.

At 1PM ET today Netflix is streaming its second annual Tudum event, where you can expect to hear news about and see trailers from its biggest franchises, including The Witcher and Bridgerton. I’ll be covering the event live alongside my colleague Charles Pulliam-Moore, and you can also watch along at the link below. There will be lots of expected names during the stream, but I have my fingers crossed for a new season of Hemlock Grove.


T
Twitter
Tom WarrenSep 23
Has the Windows 11 2022 Update made your gaming PC stutter?

Nvidia GPU owners have been complaining of stuttering and poor frame rates with the latest Windows 11 update, but thankfully there’s a fix. Nvidia has identified an issue with its GeForce Experience overlay and the Windows 11 2022 Update (22H2). A fix is available in beta from Nvidia’s website.