Elon Musk and Tesla are facing investigations by the US Justice Department and the Securities and Exchange Commission over allegations that company funds were used to plan a massive glass house for Musk in Austin, Texas, according to a report by the Wall Street Journal.
The federal prosecutors in Manhattan have requested information regarding the project, including the amount Tesla spent and its true purpose, as well as other benefits received by Musk. Publicly traded companies, such as Tesla, are required to disclose any benefits worth more than US$10,000 paid to senior executives.
An internal investigation was conducted earlier this year by Tesla on a program known as “Project 42,” which was reportedly focused on building an all-glass house for Musk near Tesla’s headquarters in Austin, as reported by the Journal. The use of millions of dollars on specialized glass left employees puzzled, leading to a probe by Tesla lawyers and board members. The outcome of the investigation and whether Tesla received the glass remain unclear.
Musk, 52, and Tesla have been under scrutiny by regulators for some time. The billionaire has publicly clashed with the SEC and accused the agency of targeting him unfairly. In 2018, Musk reached a US$20 million settlement with the SEC after falsely claiming he had secured funding to privatize Tesla, causing the company’s stock price to surge. Although he later criticized the terms of the settlement, his request to have it dismissed was denied by a judge.
According to the Journal, the SEC has been actively pursuing cases involving CEOs receiving undisclosed benefits. One such case involved the Hilton hotel chain.
Credit: The Star : Tech Feed
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