Electric car maker Tesla in February appointed David Searle as deputy general counsel and senior director of compliance.
The appointment is notable for several reasons. First, the compliance director role appears to be Tesla’s first ever—but if CEO Elon Musk’s past behavior is any guide, the position may strictly be little more than window dressing (as he has indicated about other positions in the company).
Second, Searle’s appointment as “deputy general counsel” comes around the same time as a newly filed investor lawsuit against Musk and other directors at Tesla. The complaint, filed in Delaware Chancery Court on March 8 but not unsealed until March 11, argues Musk continues to issue tweets without the preapproval of Tesla’s securities counsel and disclosure controls committee, in violation of settlements with the Securities and Exchange Commission (SEC).
The complaint further states Tesla’s board continues to fail to exercise effective oversight of Musk. “Similar to its repeated failure to implement and apply internal controls regarding oversight of Mr. Musk, the board has also consistently failed to ensure that Tesla has an independent general counsel who can provide advice untainted by Musk,” the complaint states.
It’s no secret Tesla has had a difficult time holding on to its general counsel. In December 2019, Jonathan Chang resigned from the position. Chang had assumed the general counsel role from Dane Butswinkas, who left the job after just two months with the company. Prior to Butswinkas (who represented Musk in his legal battle with the SEC), the role was held by Todd Maron, who was Elon Musk’s divorce lawyer before joining Tesla in-house in 2013.
“The fact that Tesla lost three general counsels in one year reflects the fact that none of them were able to exercise any independent advice on matters that differed from Musk’s desired outcome,” the complaint states. “The board was acutely aware of the need for Tesla to have a general counsel who could provide advice as to what was in Tesla’s best interests. It was also well-aware that Musk was interfering with the general counsel and dictating Tesla’s positions on issues, including with respect to compliance with the SEC’s judgment.”
Tesla did not publicly announce Searle’s appointment. Rather, Searle’s LinkedIn profile shows he joined Tesla as deputy general counsel and senior director of compliance in February (first reported by Law360). Searle joins Tesla from Walmart, where he was appointed chief ethics and compliance officer - international in May 2019.
Prior to Walmart, Searle’s previous roles include chief compliance officer and deputy general counsel at global industrial aviation services company Bristow Group; director of compliance at chemicals and plastics distributor Nexeo Solutions; and audit and investigations counsel at Baker Hughes. He began his career as an associate at Baker Botts before becoming an assistant U.S. attorney in Texas.
As Tesla no longer has a PR department (because it dismantled it in October 2020), it did not return requests for comment.