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Elon Musk has been a staple in news stories over the last few years. Billionaire philanthropist and creative visionary for ground breaking companies such as Tesla and SpaceX, the parallels to a modern day Iron Man seem unquestionable. It seemed like Mr Musk could do no wrong, until now that it is. The last few months have been exceptionally tough on this outspoken innovator, as Tesla is burdened with numerous cases for dispute resolution, defending against former employees and the US government alike.

Tesla vs Martin Tripp

Earlier this year, Tesla took legal action against former employee, Martin Tripp - who was accused of violating corporate law, by hacking into Tesla systems and passing on confidential information to other organizations.

However, Martin Tripp quickly counter-sued, claiming that Tesla was using dangerous and extremely wasteful practices that needed to be brought to light. He refers to himself as a whistle-blower and seeks damages for defamation and emotional distress, the first case in Tesla’s growing dispute resolutions repertoire.

SolarCity Scramble

A subsidiary of Tesla, SolarCity is an organization that works on providing clean, renewable solar energy to the masses. Three employees of the company came forward with information detailing the existence of falsified sales accounts that were used to severely inflate the organization’s valuation, in a brazen defiance of corporate law.

After first reporting their findings to upper management, which were ignored entirely. These allegations are currently being invested by regulatory authorities that monitor for legal compliance of financial reporting. Tesla’s investigation into the matter showed no discrepancies.

SEC Violation

In August 2018 Elon Musk tweeted two short lines, which threw Tesla into its most severe dispute resolution case yet. His tweet said the following:

“Am considering taking Tesla private at $420. Funding secured.”

This tweet sent stock prices for Tesla rocketing sky high, and everything seemed fine. But in a weird turn of events, the Securities and Exchange Commission (SEC) for fraud pounced at this tweet, ready to take Elon Musk to court. It was the first time (or at least the most publicized occurence of) corporate law had been broken through a tweet!

As per the SEC, here are some of the legal compliances, Elon Musk was in clear violation of.

• He had not agreed upon any terms for funding before declaring he would take Tesla private.
• He had not discussed setting share prices at $420 with any possible funding sources.
• He did not contact any Tesla shareholders to ask for their views on the matter of going private.
• He had not conducted any research regarding whether retail investors would be able maintain investments if Tesla went private, nor had he bothered to look into the legal compliances and regulatory approvals needed for doing the same.

For violating corporate law procedures, Elon Musk and Tesla have both been fined $20 million each, by the SEC. Elon Musk has also been asked to step down as chairman of Tesla, but is allowed to maintain his role as CEO.

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