Professor Roberta Karmel Discusses Tesla-SEC Settlement with Bloomberg

10/12/2018

Professor Roberta Karmel, an internationally renowned securities regulation expert and former Commissioner of the U.S. Securities and Exchange Commission (SEC), was quoted in an Oct. 10 Bloomberg story about how a tweet by Tesla CEO Elon Musk may affect his settlement in a fraud suit with the SEC.

“[Musk] kind of pooh-poohed the settlement,” said Karmel. “It seems like that was a denial of some kind.”

Musk had fired off a sarcastic tweet referring to the SEC as the “Shortseller Enrichment Commission” just days after reaching a $40 million settlement to resolve charges that he misled the public by tweeting about plans to take Tesla private.

U.S. District Judge Alison Nathan in the Southern District of New York will soon be ruling on the settlement. Although she may request additional information about Musk’s tweeting and what controls Tesla might put in place to manage the flow of information from its outspoken CEO, Karmel thinks the judge will still approve the deal: “I think it is unlikely this judge will decide not to approve the settlement,” she said, but cautioned, “If I were the judge I’d ask what’s going on here, you’re not supposed to do that. Usually you agree that ‘neither admit nor deny’ means what it means.”

A member of the faculty since 1985, Karmel has played an instrumental role in leading the Dennis J. Block Center for the Study of International Business Law as the Center’s co-director, and with developing the Center for the Study of Business Law & Regulation. In addition to her former SEC role, she is a former Public Director of the New York Stock Exchange and worked in private practice for 30 years. A widely published authority on securities regulation and international securities law, Karmel is the author of Life at the Center: Reflections on Fifty Years of Securities Regulation (Practicing Law Institute, 2014).