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U.S. Senator Elizabeth Warren, known for her outspoken stance on corporate accountability, has once again called on the U.S. Securities and Exchange Commission (SEC) to investigate Tesla, CEO Elon Musk, and the company’s board of directors. Warren’s latest appeal comes amid allegations of possible misappropriation of Tesla resources and conflicts of interest arising from Musk’s dual role at Tesla and X—formerly known as Twitter.
Warren, a member of both the Senate’s banking and armed services committees, had previously urged the SEC to investigate Tesla in July, and had expressed similar concerns in a letter to Tesla’s board chair, Robyn Denholm.
In a six-page letter dated March 21, Warren highlighted new worries, emphasizing that recent evidence suggests Tesla’s board lacks independence from Musk. She cited a Delaware Chancery court ruling from January, which found that Musk controlled Tesla and its board breached their fiduciary duties by awarding Musk an equity compensation plan worth $55.8 billion.
Pointing to Tesla’s declining share price, which has dropped approximately 30% year to date, Warren raised concerns about Musk’s recent public statements and actions. These include his demand for 25% of voting power over Tesla, his proposal to move Tesla’s incorporation site to Texas, and his threat to develop artificial intelligence products elsewhere if he doesn’t gain control.
Warren’s letter also referenced Musk’s response on social media, where he referred to her as “Senator Karen” and suggested that her economic and tax advisor is Sam Bankman-Fried (SBF), the founder of the collapsed crypto company FTX. SBF, who was convicted in 2023 on seven criminal counts related to the company’s collapse, is the son of Stanford legal scholar Joseph Bankman, who had supported Warren’s proposed legislation in 2016 aimed at simplifying the U.S. tax code.
A spokesperson for Warren’s office denied Bankman’s involvement in her activities. Meanwhile, Musk and the SEC have a history of clashes, with Musk previously charged with civil securities fraud in 2018 over tweets regarding a potential take-private deal for Tesla.
The SEC, led by Chair Gary Gensler, stated that it would respond to members of Congress directly regarding Warren’s request. If the SEC proceeds with an investigation into Tesla and Musk, it would escalate tensions between the regulatory agency and one of the world’s wealthiest individuals.
Despite Tesla shares closing down slightly for the day, Warren’s renewed call for an investigation underscores growing concerns over governance issues within the electric car company and Musk’s sprawling business empire.