The SEC hasn't stopped Elon Musk. Will anyone?
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The SEC hasn't stopped Elon Musk. Will anyone?

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Good morning! When it comes to stopping Elon Musk from sending the markets into a tizzy with a single tweet, the SEC’s enforcement tactics just aren’t working. And Tesla’s board isn’t doing a great job of reining him in, either. I’m Owen Thomas, and Musk once called me “Silicon Valley’s Jayson Blair.”

If you come at the Technoking, you best not miss

Tesla doesn’t have a CEO but a “Technoking." Its CFO also goes by “Master of Coin.” The only title that seems to be missing on Elon Musk's small council is “Master of Tweets.”

For years, the SEC has been trying — and mostly failing — to curb Musk’s habit of sending markets gyrating with his tweets. After Musk falsely claimed on Twitter that he had secured funding to take Tesla private, the SEC charged him in September 2018 with securities fraud. Two days later, Musk, Tesla and the SEC settled. A key term of that agreement, which included $40 million in fines, was that Tesla would appoint a lawyer to review any market-moving tweets.

Three years later, there are still questions about how Musk is behaving. Tesla’s recently released annual report revealed that it had received another subpoena about whether the company was complying with key terms of the agreement.

  • The timing of the subpoena, received on Nov. 16, is telling: It came two weeks after Musk asked his tens of millions of followers if he should sell 10% of his Tesla stock — the kind of thing investors might want to know about.
  • It followed years of back-and-forth between the SEC and Tesla’s lawyers. After Musk tweeted that he thought Tesla’s stock price was too high, the agency noted Musk’s “repeated refusals to submit his covered written communications on Twitter to Tesla for pre-approval.” The lawyers claimed regulators were trying to “harass Tesla and silence Mr. Musk.”

Here’s a better question: What is Tesla’s board doing? Besides all its members cashing in their stock options, that is.

  • As a term of the settlement with the SEC, Tesla had to name an independent chair. It selected Robyn Denholm, an Australian tech executive. Last Thursday, she made $22 million exercising Tesla options, on top of another $112 million last year, according to Benzinga.
  • Denholm serves on Tesla’s Disclosure Controls committee alongside James Murdoch and Kathleen Wilson-Thompson. A specific duty of that committee is to oversee Musk and Tesla’s compliance with the consent agreement reached to settle the SEC’s charges.
  • What has the committee visibly accomplished? ¯\_(ツ)_/¯ Tesla has dissolved its PR department, so there’s no one to ask over there. Denholm did not respond to a message sent to her via LinkedIn.

But the SEC may have overreached, too. The judge overseeing the Musk settlement once scolded both sides, telling them to put on their “reasonableness pants” and better define what kind of tweets required review.

  • The SEC has struggled to adapt Regulation FD, which requires full disclosure, to social media.
  • Former Sun CEO Jonathan Schwartz pushed the agency to recognize that corporate blogs, published on the internet and simultaneously available to all investors, complied with the law.
  • Are tweets that different? Musk’s riffs might shake the stock, but all shareholders have the same opportunity to act on them. (This is why the Bloomberg Terminal has included Twitter feeds for almost a decade.)

It’s clear that the SEC’s approach to enforcement isn’t working. Musk is a character out of science fiction. So if the punishment were to fit the crime, perhaps the SEC could take inspiration from writer Neal Stephenson’s dystopian “Snow Crash.” Unable to deter a criminal from reoffending, authorities tattooed a warning to others on his forehead: “POOR IMPULSE CONTROL.”

It’s 2022, so might as well mint it as an NFT and add it to Musk’s Twitter profile.

— Owen Thomas (email | twitter)

On the calendar

Crypto Regulation: From buyer beware to federal oversight

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People are talking

President Biden finally gave Musk the Tesla shout-out he's been wanting, in a discussion about American manufacturing:

  • "From iconic companies like GM and Ford building out new electric vehicle production to Tesla, our nation's largest electric vehicle manufacturer ..."

Sequoia’s Roelof Botha said he wouldn’t necessarily describe himself as a VC:

  • “I think of myself as being part of the Sequoia team … And I don't really want to call myself a VC. It's because we're not fungible in that manner. I'm a non-fungible token.”

Nvidia won’t be too shaken up by the fallen Arm deal, chips analyst Tristan Gerra thinks:

  • “We expect Nvidia to continue leveraging its Arm-based architectures.”

Emerge’s Sly Lee said it’s hard to build hardware, especially customer hardware:

  • “There's actually a lot of nuance to building your own hardware.”

Neil Young told Spotify workers that Daniel Ek is the issue, not Joe Rogan:

  • “Get out of that place before it eats up your soul.”

Making moves

Bemnet Yemesgen is joining Twitter. Yemesgen is currently a creative director at Discord.

The Peloton talent drain continues. Sam Bowen, its hardware engineering head, and Rob Barker, who ran its commercial equipment business, are both leaving as layoffs and turnover continue at all levels.

Tommi Forsström is WorkStep’s new CPO. He previously led product innovation at companies including Shutterstock and Splice.

Microsoft might buy Mandiant, a cybersecurity research and incident response company, Bloomberg reported. An acquisition would build on Microsoft’s slew of cybersecurity products.

Qualcomm and Ferrari are teaming up. Ferrari plans to use Snapdragon chipsets in both its road cars and Formula One racing cars.

Amazon’s telehealth service is now available nationwide. Amazon Care started in 2019 as a pilot program that offers virtual care, telehealth consultations and in-home visits.

In other news

The strangest story you'll read today: The Justice Department seized $3.6 billion in stolen bitcoin and charged Ilya Lichtenstein and Heather Morgan with conspiring to launder the cryptocurrency. And that's just the beginning of the insanity.

What time is the “Crypto Bowl”? Crypto exchanges like FTX, Coinbase and are expected to dominate Super Bowl ads this year, but it’s unclear what their messaging will look like.

Apple’s Tap to Pay is almost here. Stripe and Shopify are the first in line to use the contactless payments service.

Bill Gates is writing a book called “How to Prevent the Next Pandemic,” which will include lessons learned from the COVID-19 pandemic, Gates’ opinions on vaccines and more. It goes on sale in May.

Mark Zuckerberg will have updates on Meta’s AI work at its Inside the Lab event on Feb. 23.

Meta said it's not actually threatening to leave Europe, after it previously said it might pull out over new data-sharing laws. At this point, Meta probably can't afford to leave anyway.

Apple is giving its retail workers more benefits, sources told Bloomberg. Beginning April 4, full-time and part-time employees will get more sick days and vacation time, among other changes, in an effort to boost retention.

Google has an alternative to the browser history. Chrome now has a feature called Journeys, which lets people revisit a curated version of the subject matter they were previously searching for.

Inside the metaverse office

Picture this: You wake up, chug your coffee, then head to your at-home office. Only instead of logging onto Slack or checking your email, first you have to enter the metaverse.

Protocol’s Lizzy Lawrence and I spent a day exploring three different virtual office spaces. We had a dance party in one metaverse, played around with sticky notes in another, and raced go-karts in another virtual world. I had a major headache by the end of it all, but some companies said they spend practically all their work day in these spaces.

Does a workday in the metaverse sound like a headache to you? Reply to this email and let us know!

— Sarah Roach


Samba TV operates the world’s largest independent source of first party connected TV data helping brands, agencies and content owners to plan, buy and measure all in one place. The State of Viewership report offers the industry’s most accurate insights into television viewing and advertising engagement. Download the report at

Learn more

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