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Elon Musk taunts SEC as 'Shortseller Enrichment Commission'

Musk lashed out at the enforcement agency, praising the “incredible work” of the “Shortseller Enrichment Commission.”
Image: Elon Musk speaks onstage at \"Elon Musk Answers Your Questions!\" during SXSW
Elon Musk answers questions during SXSW at ACL Live on March 11, 2018, in Austin, Texas.Diego Donamaria / Getty Images for SXSW

Another tweet from billionaire tech entrepreneur Elon Musk might get the attention of the Securities and Exchange Commission — this time on purpose.

Musk on Thursday lashed out at the enforcement agency, praising the “incredible work” of the “Shortseller Enrichment Commission” days after reaching a proposed settlement with the SEC over a series of tweets that Musk sent in August.

“Just want to [say] that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!” the Tesla CEO wrote on Twitter.

Musk drew the agency’s attention in August when he tweeted that he was considering taking Tesla private and had “funding secured” for such a transaction. The SEC sued last week, alleging that the tweet and others Musk sent were false and misleading to investors.

Under the proposed settlement, announced on Saturday, Musk will step down as board chairman at Tesla while remaining CEO, and he and Tesla will each pay $20 million in penalties.

Wall Street short sellers try to make money on companies they expect will see a dip in their stock price by borrowing shares they believe are overpriced, selling them, and then purchasing them again later at what they hope will be a lower price.

Some short sellers have targeted Tesla as potentially overpriced, making it among the most-shorted stocks on the market and leading to a public feud with Musk.

Musk has repeatedly spoken out against short sellers, accusing them of peddling fear and warning that their bet would “explode.”

The SEC declined to comment on the tweet. Tesla did not immediately respond to a request for comment on it.

Musk shortly followed up his initial tweet with a response to tech blogger Robert Scoble, doubling down on his taunt.

The proposed settlement requires court approval, and earlier on Thursday, U.S. District Judge Alison Nathan in New York ordered Musk and the SEC to explain further why she should approve it, saying it needed to be “fair and reasonable.”

Musk may soon find himself somewhat muzzled on Twitter and any other social network, at least when discussing business.

If the settlement goes forward, Musk will be required to comply with mandatory procedures at Tesla regarding “oversight of communications,” including oversight of posts on Twitter, according to settlement papers filed with the court.

Shares in Tesla were down 2.2 percent in after-hours trading after Musk’s tweet.