Elon Musk Has an SEC-Mandated Twitter Sitter to Control His Communications. It’s Not Going Well
It’s a mystery: Who, exactly, is Elon Musk’s Twitter Sitter? And what the heck is he or she thinking?
Tesla has declined to identify the in-house lawyer who is supposed to watch over Musk’s prodigious—and legally contentious—tweeting habits. Now that the billionaire is once again courting trouble with the U.S. Securities and Exchange Commission via Twitter, the question of who, if anyone, can reel him in has taken on new urgency.
“It’s the most unique job in the world,” said Gene Munster, managing partner at the venture capital firm Loup Ventures. Considering that Musk shows no sign of backing down even after the SEC asked a judge Monday to hold the Tesla chief executive officer in contempt of court, “it adds a layer of complexity to this person’s job.”
The terms of a settlement with the SEC last year require that Musk get approval before communicating material information to investors. His social-media minder didn’t bless a Feb. 19 tweet that boasted the electric-car maker would produce 500,000 vehicles this year.
The sitter—whose official title at Tesla is alternately Disclosure Counsel or Designated Securities Counsel—did step in after seeing the offending tweet, arranging to meet Musk to draft a clarifying post. That one went out to his 24 million followers four hours after the first one, saying that, really, deliveries would reach about 400,000, a number in line with the one the company has used in formal disclosures.
The SEC wasn’t mollified. It issued the contempt-of-court request, arguing the first post breached last year’s agreement, which settled claims that Musk misled investors with tweets about taking the company private. Tesla’s attorneys contend what he wrote just echoed what had already been said on an earnings call.
Musk took to Twitter to back up that position, saying the SEC had failed to read the transcript of that call and adding, “How embarrassing…” In another post, he piled on: “Something is broken with SEC oversight.”
U.S. District Judge Alison Nathan told Musk on Tuesday to file a brief responding to the contempt-of-court request by March 11.
An outside lawyer for Tesla, Bradley Bondi, has already defended the CEO, and the sitter, to the SEC.
“The Designated Securities Counsel continually monitors Mr. Musk’s tweets,” he wrote to the agency. “Upon seeing the 7:15 PM EST tweet, the Designated Securities Counsel immediately arranged to meet with Mr. Musk at the Fremont factory. Mr. Musk and the Designated Securities Counsel together drafted a clarifying tweet.”
So anyway, who is this sitter? There was speculation that Dane Butswinkas, Tesla’s recently departed general counsel, had the gig, though that seems unlikely. The agreement with the SEC never specified that the person had to be the general counsel, just an experienced securities lawyer. In any event, Butswinkas left on Feb. 20, and Monday’s filing by the SEC suggests the person is a current employee.
The agency knows who it is, but isn’t saying. Natalie Strom, a spokeswoman for SEC Chairman Jay Clayton, said the regulator had no comment on the case beyond what was in Monday’s court filing.