Warren Urges SEC Probe Into Musk's Alleged Tesla Fund Misuse

Sen. Elizabeth Warren is once again urging the Securities and Exchange Commission (SEC) to investigate whether Elon Musk's interactions with Tesla board members have crossed ethical boundaries, Amanda Gerut reported for Fortune.

Senator Warren argued that Musk treats publicly traded Tesla as if it were his own company, disregarding the fact that shareholders collectively own Tesla. I Photo: Gage Skidmore Flickr

In a letter addressed to SEC Chair Gary Gensler, Warren raised multiple concerns about Musk, asserting that all of these issues warrant investigation by the SEC.

Warren argued that Musk treats publicly traded Tesla as if it were his own company, disregarding the fact that shareholders collectively own Tesla.

Musk, who holds a 20.5% stake in the electric vehicle manufacturer, declared in January that he would be hesitant to develop Tesla as a leader in AI and robotics without having a 25% stake in the company.

This move, according to Warren, prioritized the interests of XAI, a startup Musk founded in March 2023, over those of Tesla.

In response to Musk's statements, Warren highlighted the silence from the Tesla board, which includes Musk's brother, Kimbal Musk, and Tesla's former chief technology officer, JB Straubel.

Warren criticized the board for not clarifying Musk's level of control over Tesla, the board's independence, his ownership stake, or Tesla's potential in the field of AI.

Warren's call for investigation coincides with a challenging period for Musk, with Tesla's stock down 30% for the year and increasing pressure from investors for Musk to improve his conduct as CEO.

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