A phone call from Mark Cuban helped convince Elon Musk to settle SEC charges
A 15-minute phone call from billionaire Mark Cuban helped break an impasse between Tesla Inc TSLA, -4.40% Chief Executive Officer Elon Musk and federal securities regulators on charges that he misled investors in an August tweet saying Tesla would go private at $420 a share.
Late last Thursday night—after Musk initially walked away from an agreement to settle the civil Securities and Exchange Commission charges—one of his lawyers asked Cuban, owner of the Dallas Mavericks, to prod Musk to reconsider, people familiar with the call say.
Cuban, who won a five-year battle with the SEC after it charged him with insider trading a decade ago, told Musk in the call that he would face a long court fight that would take him away from managing his companies. Based on his own experience, Cuban told Musk of the difficulties he had endured during multiyear litigation with the SEC, a person close to the situation said.
Cuban called at the behest of Chris Clark, one of Musk’s lawyers who represented Cuban in his dispute with the SEC. He advised Musk on the phone that a settlement wouldn’t be as damaging as a court fight with the agency. “I explained where the SEC used questionable practices in my case, and how he could expect the same,” Cuban said in an email Wednesday night. “I asked him if he could name five people who had settled with the SEC, knowing he wouldn’t be able to name any.”
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