The SEC just went nuclear on Elon Musk. Here’s what happens next

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“Most defendants try to settle as quickly as possible. But Mr. Musk has never been the perfectly rational actor,” Coffee said.

Even though Musk may now want to settle, the litigation may linger for weeks or even months.

That could pose problems for debt-riddled Tesla. The company says it has no need to raise money, but Tesla analysts believe the company will need to raise cash soon to pay down debt and invest in its business. Investors may balk at the idea of lending Tesla more money when its CEO is in limbo and top executives are hitting the exits.

Charles Whitehead, a professor at Cornell Law School, said it’s possible that Musk reaches a settlement that allows him to take a lesser role — but remain at the company.

“Why would the SEC want to harm the company more than the tweet itself?” Whitehead said. “That would be like throwing the baby out with the bathwater.”

CNNMoney (New York) First published September 27, 2018: 8:42 PM ET

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Jovan Mahoney
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Jovan Mahoney

+1 this

Lucy Duke
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Lucy Duke

thanks for that!