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Tesla CEO charged with making false statements about funding

Businesses small and large are required to follow certain rules. The world of regulatory compliance and securities law can be complex, but at its heart readers of this blog should know that the rules in places are there to keep the game fair for companies, shareholders and prospective investors. This can mean penalizing individuals and corporations that exaggerate earnings, misstate important information about their structures or otherwise entice financial speculation and interest in securities that are not founded in reality or even legal processes.

A prime example of how securities law can affect a corporation and its leaders' abilities to disseminate information about it recently broke in the news. Florida residents may know Elon Musk as the chief executive officer of Tesla, a company that has made a name for itself in the electric car market. Musk allegedly used the social media platform Twitter to issue a statement that suggested he had secured funding to make Tesla, a publicly traded company, private.

In truth, the Securities and Exchange Commission alleged that Musk did not in fact have any committed investors to take his corporation private and that through his tweets he may have misled investors about the future of the entity. Since filing its complaint against Musk the SEC and Musk have settled the lawsuit.

In a world where information can be shared faster than a heartbeat and can reach millions of people through a simple 140 character statement, understanding securities law is imperative for any organization that works within the confines of the SEC and regulatory oversight. Those who wish to stay ahead of their requirements to operate in a fair and legal manner may seek out securities lawyers.

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