According to an unverified report, the Securities and Exchange Commission (SEC) in the U.S. will be investigating Elon Musk’s recent tweets about meme cryptocurrency Dogecoin.
Over the past month Musk has repeatedly tweeted about Dogecoin, sending the price of the meme crypto soaring over 500 per cent with a market cap of $US6.63 billion.
The Tesla CEO got aboard the Dogecoin train around the same time that GameStop stock was shooting up thanks to the r/wallstreetbets subreddit.
Since then, he has tweeted about Doge quite regularly, which has generally resulted in a price rise in the crypto.
— Elon Musk (@elonmusk) January 28, 2021
ur welcome pic.twitter.com/e2KF57KLxb
— Elon Musk (@elonmusk) February 4, 2021
Musk was still tweeting about Dogecoin this week. When asked why he loves the coins so much he replied “I love dogs & memes.”
— Elon Musk (@elonmusk) February 24, 2021
But if this report is to believed, the SEC might not see the tweets as simple shitposts, but as market manipulation.
This supposed news was first reported by First Squawk, a financial newswire.
“SEC IS SAID TO INVESTIGATE TESLA CHIEF EXECUTIVE MUSK FOR HIS TWEETS ON DOGECOIN: SOURCES FAMILIAR WITH THE MATTER,” the tweet read.
This rumour is yet to be substantiated, but Musk did respond to it on Twitter.
“I hope they do,” Musk said. “It would be awesome.”
Musk followed this with several laugh-crying emojis.
I hope they do! It would be awesome ????????
— Elon Musk (@elonmusk) February 25, 2021
Musk and the SEC have a past
While this is still just a rumour, Musk has had run-ins with the SEC in the past.
In fact, exactly two years ago today we reported on the CEO potentially being in contempt of court after continuing to tweet about Tesla after a settling with the Commission.
The SEC first went after Musk in 2018 after it claimed that he made “false and misleading” statements on Twitter about privatising Tesla.
You may remember this as the ‘420 tweet’ where Musk claimed he was considering taking the company private and that the share price would be $US420.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
It was believed that the tweet itself was a gratuitous marijuana reference used to amuse his girlfriend, Grimes.
The tweet resulted in the SEC suing Musk for ‘misleading investors’ and eventually it resulted in a settlement.
Part of the terms of this agreement was that Musk would stop tweeting financial information about Tesla. He was also supposed to get legal approval on any tweets that may financially impact the company.
But that apparently didn’t happen.
And despite both Tesla and Musk having to pay $US20 million in fines, Musk still seemed to come out on top.
Musk inadvertently paid Tesla’s part of the fine by buying $US 20 million worth of stock once the company did go public.
On top of that, the share price of Tesla skyrocketed in 2020 to the point where the company engaged in a stock split.
And since his run-in with the SEC, Musk has also never been particularly subtle about his contempt for the organisation.
SEC, three letter acronym, middle word is Elon’s
— Elon Musk (@elonmusk) July 2, 2020
It will be interesting to see whether this report turns out to be real. But on the surface it would make sense.
Dogecoin had an incredibly low market cap before Musk began tweeting about it. It could argued that he used his influence to significantly increase the coin’s position and thus earn him a tidy profit.
On the other hand, Musk could have simply been posting about it for the lols, which would be on brand.
We won’t know more until official news drops, but if it does, we expect to see some chaotic responses from Musk.