DOWN 12%.
TWO RETAILERS NOT DOING WELL.
>>> HOW ABOUT TESLA, THE SEC
SENT SUBPOENAS ABOUT ELON MUSK'S
TWEET ABOUT TAKE THE COMPANY
FORMER SECURITIES & EXCHANGE
COMMISSION CHAIR.
HARVEY, WELCOME TO THE PROGRAM.
GOOD TO SEE YOU, SIR.
>> GOOD TO BE WITH YOU.
STUART: WHAT IS IT MUSK COULD
HAVE DONE THAT WOULD BE ILLEGAL?
>> THERE ARE POTENTIALLY TWO
AREAS.
THE FIRST IS, HE ISSUED HIS
TWEET IN THE MIDDLE OF THE
TRADING DAY.
THAT'S HIGHLY UNUSUAL AND VERY
PROBLEMATIC.
USUALLY ANNOUNCEMENTS ARE MADE
THE SEC PROBABLY WILL LOOK AT
WHETHER HE HAD AN INTENTION TO
INFLUENCE THE PRICE OF THE
UP AFTER HE MADE HIS TWEET.
THE SECOND ISSUE THEY WILL LOOK
AT, WHICH IS THE MORE
SUBSTANTIVE IN THIS PARTICULAR
CASE I THINK, IS WHETHER MUSK
COMMITTED FRAUD.
ENOUGH TO PAY SHAREHOLDERS $420
A SHARE WAS IN FACT TRUE.
THOSE WOULD BE THE TWO ISSUES,
BASED ON HIS SUBSEQUENT BLOG
POST, IT APPEARS HE DID NOT HAVE
SECURED FUNDING, EVEN THOUGH HE
SAID HE DID.
STUART: OKAY.
WITHOUT BEING PEJORATIVE, IF
SAID HE HAD, WHAT ARE
CONSEQUENCES?
>> WE, THE CONSEQUENCES RANGE
FROM CIVIL LAWSUIT BY THE SEC
SEEKING INJUNCTIVE RELIEF, A
COURT ORDER SAYING HE CAN NOT
EVER DO THAT TYPE OF THING
AGAIN.
THE SEC HAS PENALTIES THAT COULD
BAR HIM FROM BEING AN OFFICER OR
DIRECTOR OF A PUBLIC COMPANY IF
A COURT AGREES WITH IT.
THE SECURITIES LAWS IS ALSO A
POTENTIAL CRIMINAL CASE.
SO HE COULD FACE CRIMINAL
CHARGES AS WELL AS CIVIL
CHARGES.
STUART: AGAIN, WITHOUT KNOWING
WHERE THIS INVESTIGATION WILL
ACTUALLY LEAD AND WHAT
AS CEO, THE RUNNER OF THE TESLA
COMPANY, IS LIMITED?
>> IT IS VERY HARD TO SAY RIGHT
NOW.
PARTICULARLY BECAUSE HE IS AN
OUTSIZED PERSONALITY.
HE IS ONE OF THE RARE CEO'S WHO
DEFINES HIS COMPANY RATHER THAN
THE OPPOSITE.
THEREFORE I THINK THE BOARD WILL
DO EVERYTHING IN ITS POWER TO
TRY AND KEEP HIM IN PLACE, BUT
HIS CONDUCT HERE LOOKS VERY,
VERY PROBLEMATIC.
STUART: FOR MANY YEARS YOU
CHAIRED THE SEC.
HAVE YOU SEEN ANYTHING LIKE THIS
BEFORE AT YOUR TIME IN THE
SECURITIES & EXCHANGE
COMMISSION?
>> NO, I HAVE SEEN A LOT OF
STRANGE THINGS BUT THIS MAY BE
ONE OF THE STRANGEST THINGS I'VE
EVER SEEN.
STUART: IS IT LEGAL, IS IT OKAY,
SO TO SPEAK TO MAKE THIS
ANNOUNCEMENT BY TWEET?
>> IT'S POTENTIALLY TROUBLESOME
BUT IT IS NOT ILLEGAL AND MY
VIEW IS, IT IS NOT THE MEDIUM
THE MESSAGE AND THE TIMING AND
THE MANNER IN WHICH HE DELIVERED
PRIVATIZATION, HOW LONG DOES IT
TAKE TO LOOK INTO THAT?
>> IT SHOULDN'T REALLY TAKE A
LONG TIME BUT THEY WILL NODE TO
TAKE TESTIMONY.
SO THERE WILL BE TESTIMONY,
FIRST DOCUMENT PRODUCTION WHICH,
IF THE NEWS STORIES ABOUT
SUBPOENAS IS CORRECT, WILL START
FAIRLY SHORTLY.
AND THEN THERE WILL BE
INTERVIEWS.
THEN THE AMASSING OF THAT DATA
WILL HAVE TO BE ANALYZED AND
SO WE'RE LOOKING AT MONTHS, NOT
DAYS OR WEEKS.
STUART: THAT'S A LONG TIME IN
THIS BUSINESS.
