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Cramer: The SEC Just Gave Tesla Shareholders A Helping Hand

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Cramer: The SEC Just Gave Tesla Shareholders A Helping Hand

Tesla Inc (NASDAQ: TSLA) CEO Elon Musk reached a settlement with the Securities and Exchange Commission in which the executive must step down as chairman of the automaker, among other terms. 

Cramer: SEC Is Doing Tesla A Favor

The SEC's actions against Tesla are doing the company a favor, as the regulatory body's demands are all are shareholder-friendly, CNBC's Jim Cramer said Monday. Tesla investors have been demanding independent directors in the past — and as a general rule, every CEO, particularly Musk, should have their tweets vetted before publication, he said. 

Ex-SEC Director: 'Appropriate Resolution'

Musk and Tesla reached an "appropriate resolution" with the SEC, as it is a case that "no one wanted to litigate" in the first place, former SEC Assistant Director Jordan Thomas told CNBC in an interview. If the SEC were to pursue its case against Tesla and Musk over time, it would become the trial of the decade, he said. 

Perhaps more important, the SEC isn't guaranteed to emerge a winner after a long and exhaustive case that would require tremendous resources, Thomas said. Even if the regulatory body won the case, it would not necessarily succeed in barring Musk from his duties or, even worse, could put Tesla out of business, he said. 

The SEC got the settlement it wanted even though Musk's defense was fundamentally weak, Thomas said. However, the Department of Justice appears to be "not in the game" if the SEC settled its case, he said, although this doesn't imply Musk and Tesla are in the clear yet. 

Thomas agrees with Cramer and said it is "absolutely" wise for companies to take steps to monitor their executives' public communications.

Related Links:

Tesla Analysts Weigh In On Musk's SEC Lawsuit

Vertical Group's Gordon Johnson Thinks More SEC Charges Will Come For Tesla: 'Fraud Is In The DNA'

Photo courtesy of Tesla. 

Posted-In: CNBC Elon Musk Jim CramerSEC Media Best of Benzinga

 

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