Photo: Bloomberg Photo By Qilai Shen
Miscues who made 2018 a disturbing year for Elon Musk's back.
Tesla announced that his general lawyer leaves Wednesday two months after hiring him in the wake of Musk & # 39; s purchases with US securities regulators. Hours before that news sent the CEO out tweets reminiscent of those who put him and the company in legal danger last year.
Dane Butswinkas, the lawyer who represented Musk in his legal struggle with the US Securities and Exchange Commission, is leaving Tesla for a poor cultural fit and the desire to return full time to his trial at Williams & Connolly in Washington. Jonathan Chang, a vice president of Tesla's Legal Department, takes over immediately.
The departure came on the heels of a production project Musk tweeted, then backtracked from late Tuesday. Developments renew concerns about maintaining key leaders and CEO's social media habits – issues distracted from Tesla's production performance in 2018.
This is another in a number of high-profile departures, said Jeffrey Osborne, an analyst at Cowen & Co.. who bet on Tesla as a sale. "Investors have become dumped in turnover, as there has been a long-standing problem in technical, accounting, HR and now legal roles. This is just one thing on the wall of concern for investors to consider."
Tesla's stock is trading down as much as 1.4 percent from 11:40 AM Wednesday in New York. Musk, 47, already surprised investors at the end of a earnings call late last year with news that CFO Deepak Ahuja was going to go. Last year, he lost senior executives from Tesla's sales, accounting, finance, supply management, personnel and communications departments.
Musk tweeted Tuesday night that Tesla would produce around 500,000 cars in 2019. He corrected himself for hours to say he believed the company would produce at an annual rate of half a million cars by the end of this year.
If sent by another business management, the posts can read as an innocent error. But Tesla would have set up internal controls last year to keep Musk from posting important information about the company without prior approval. The SEC ordered the electric car manufacturer to hire or appoint a securities lawyer to review Musk and other senior officer's Twitter communications.
Representatives of Tesla and SEC did not immediately respond to requests for comment on Musk's tweets.  The SEC penalized Tesla after alleging that Musk committed fraud by tweeting in August he had "funding secured" to take the company private at $ 420 per share. The agency said this and other claims that the CEO on August 7 was false and misleading and affected Tesla's warehouse.
Both Musk and Tesla settled without admitting or denying wrongdoing and agreed to pay $ 20 million in punishment. The company's board of directors formed an information control committee consisting of three independent board members.
Tesla and Musk's forecasts also remain a point of contact with the authorities. The SEC has received the company over projections they made for Model 3 production rates during 2017 and other public statements related to the production of salmon.
The Ministry of Justice asked Tesla to provide information about production projections and the private statements voluntarily and to carry out its own investigation, according to a regulation on filing Tuesday. The company provided the same information in November and said in this week that there have been no significant developments in these cases since.
"We do not know that a government agency in an ongoing investigation has concluded that any errors have occurred," said Tesla in his 10-k filing Tuesday. The company said it was cooperating with the authorities and could not predict the outcome of the investigations. It is added that if the government decides to pursue enforcement actions, it can have a significant negative impact on the business.
Chang, 40, has been working at Tesla for nearly eight years and has managed most of his legal organization during his employment period, according to the company. He first started advising the automaker in 2006 as a foreign advisor to the law firm Latham & Watkins. He will report directly to Musk.
Butswinkas, 57, will continue to work with Tesla in an outside role, according to an email from the company. He had been hired in December to replace Todd Maron, who left the company after leading his legal department since 2013 and representing Musk through two divorces.
"That he continues to work with Tesla as an external council is a sign that, legally, things are fine at Tesla," said Gene Munster, a managing partner of venture capital firm Loup Ventures. "Despite Tesla's continuing challenges in maintaining senior leadership, we continue to believe that the company will succeed in driving the waves of EV and autonomy."
– – –
Bloomberg's Cecile Daurat and Ben Bain contributed.