What is the purpose of regulatory enforcement by the Securities and Exchange Commission? Is it to punish those who violate securities laws? Is it to protect the U.S. investor? Is it to deter CEOs and other senior executives from releasing insider information which may or may not be accurate or even true? All of these questions and many, many more are now facing the SEC after the tweet last week by Tesla founder Elon Musk that he was considering taking the company private at $420 per share and had “funding secured” to do so. 

Since that tweet the Tesla board of directors has formed a special committee to consider such a strategy. According to reports, the board remains blissfully unaware of any such deal and has not reached any conclusions of whether it would be advisable or even feasible. Musk himself has belatedly hired business advisors to help the process along. What remains for the SEC  to consider is all this activity after the fact, where Musk and the company try to clean up the mess derived from the tweet. 

What will be the SEC’s response? Will a simple “just kidding” from Musk get him off the hook? How about “I’m sorry?” What if he pulls it off and takes the company public at $420 per share; does this mean his original tweet was accurate? Does any of this matter as, after all, he is Elon Musk—visionaire extraordinaire. Reports note that SEC enforcement attorneys in the San Francisco office are gathering general information about Musk’s tweet. A likely focus will be on whether it was true. 

We may soon have our answers.

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