The SEC has charged Elon Musk with fraud, and the Tesla founder may have Azealia Banks to thank for his legal mess. The SEC accuses Musk of not discussing or confirming key terms to take Tesla private with any potential funding source before tweeting that he intended to do so, according to Reuters.
At the time Musk made the tweet, Banks was staying at his house while waiting to collaborate with his then-girlfriend Grimes. Banks alleged that Musk was under the influence when he tweeted, and was later “scrounging for investors… I saw him in the kitchen tucking his tail in between his legs scrounging for investors to cover his ass after that tweet. He was stressed and red in the face.”
After the SEC first subpoenaed Musk, Banks wrote a letter to him apologizing for “all of the painful events you’ve endured over the past week, as I feel as though my actions have largely exacerbated them.”
Update: As SPIN points out, the SEC’s complaint also makes specific reference to Grimes.
According to Musk, he calculated the $420 price per share based on a 20% premium over that day’s closing share price because he thought 20% was a “standard premium” in going-private transactions. This calculation resulted in a price of $419, and Musk stated that 7 Case 1:18-cv-08865 Document 1 Filed 09/27/18 Page 8 of 23 he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend “would find it funny, which admittedly is not a great reason to pick a price.”
The SEC is seeking to bar Musk as “officer or a director for a publicly traded company in the future.”