Late last year, a lawyer for Elon Musk’s Tesla Inc. allegedly called Cooley LLP to demand that the law firm fire one of its employees or it would lose the electric vehicle (EV) giant’s business, according to a report from The Wall Street Journal citing people familiar with the matter.
The individual in question is a former U.S. Securities and Exchange Commission (SEC) lawyer, hired by Cooley for its securities litigation and enforcement practice. Cooley is representing Tesla in several lawsuits, but this lawyer has no involvement in the firm’s work for Musk’s EV venture.
During their time at the SEC, however, this attorney had interviewed Musk as part of the regulator’s 2018 investigation into the Tesla CEO’s claims on Twitter of having secured funding to potentially privatize the electric automaker.
The investigation resulted in a settlement that stripped Musk of his title as chairman, fined him $20 million USD, and stuck him with a Twitter babysitter for any tweets pertaining to Tesla’s financial results, sales numbers, and proposed business combinations.
What’s more, this is only one of the many run-ins Musk has had with government bodies and regulators that have led to bad blood between them.
The world’s richest man has been pretty vocal about his misgivings with the State of California, and he didn’t shy away from butting heads with Duke University Professor Missy Cummings for her “bias against Tesla” when she was appointed senior safety adviser to the National Highway Traffic Safety Administration by the White House.
Cooley has refused to fire the attorney, who remains an associate at the firm, sources told The Wall Street Journal.
A Change.org petition was launched citing the appointment of Cummings was a conflict of interest, given her past history of bias against Tesla. The petition with over 35,000 signatures was removed by Change.org after lawyers for Ms. Cummings threatened legal action, citing defamation.
Since then, sources tell the WSJ the NHTSA has now forced Cummings to recuse herself from any matters related to Tesla. The U.S. Department of Transportation confirmed her recusal.
Since early December, Tesla has started taking steps in several open cases to replace Cooley or add additional counsel, according to legal documents. Furthermore, Musk’s other company, SpaceX, has stopped using Cooley for regulatory work entirely.
Last month, the SEC opened a formal investigation into Tesla’s solar business after a whistleblower reported that the company did not adequately disclose the fire risk potential of its solar panels to shareholders or the public.
