Tesla CEO Elon Musk called a U.S. regulator’s investigation “unfounded” earlier this month, before going on to praise the U.S. Justice Department for a probe into short-sellers.
Musk said on Tuesday that he is “greatly encouraged” by the Justice Department’s probe into short-sellers, adding a jab at the Securities and Exchange Commission (SEC) amidst two separate, ongoing investigations from the latter agency, according to CNBC.
In an email on Tuesday, Musk wrote, “I am greatly encouraged by the Justice Department investigating short-sellers.” Musk continued, “This is something the SEC should have done, but, curiously, did not.”
“Too often, sophisticated hedge funds have used short selling and complex derivatives to take advantage of small investors. They will short a company, conduct a negative publicity campaign to drive the stock price down temporarily and cash out, then do it all over again many times. The term for this, as you may be aware, is ‘short & distort,’ ” wrote Musk in his email to CNBC.
In December, the SEC began investigating Tesla over a whistleblower complaint about the company’s solar panels having more risks of fires than were publicly shared.
The most recent SEC probe investigates a 2018 tweet made by Musk, claiming he was considering taking Tesla private.
Tesla announced at the beginning of February that the SEC had filed a subpoena over the tweet in November of last year.
Earlier this week, Musk said through lawyer Alex Sprio that the SEC had leaked info in the federal probe, though it isn’t clear what info Spiro referred to.
In the past, Musk has called the SEC the “Shortseller Enrichment Commission,” criticizing them for not taking action on those short-selling stocks.
