Shulou(Shulou.com)11/24 Report--

Tesla CEO Elon Musk joked on Twitter this week that he would buy the U.S.-listed Premier League club Manchester United. Legal experts believe that U.S. securities regulators may review this, but initially it seems that the incident will not have too much adverse impact on Musk.

Musk, the world's richest man, tweeted Tuesday to 103 million followers,"I want to buy Manchester United," briefly dispelling investor pessimism about Manchester United shares. However, he later added that it was just a "joke."

Still, Musk's claims ignited Manchester United's share price. United shares rose as much as 17 percent in after-hours trading on Tuesday and closed at $13.67 Wednesday, nearly 7 percent higher than Tuesday's close.

Musk is known for his unconventional style. Previously, the prices of some stocks and cryptocurrencies fluctuated significantly due to his tweets. In 2018, for example, he tweeted that he had the money ready to take Tesla private, but was subsequently determined not to be so by the Securities and Exchange Commission. Since then, he has had a dispute with the SEC.

According to court and regulatory filings, the SEC conducted several public inquiries into Musk's subsequent Tesla publications and questioned Musk's proposed $44 billion acquisition of Twitter. Musk is currently trying to pull out of the deal but faces a legal battle.

Because Musk's past actions have influenced stock price movements of public companies, and he himself has tried to circumvent U.S. securities regulations, legal experts believe that Musk's tweets, whether joking or not, could attract SEC scrutiny.

"It may look like a joke to some, but not to regulators," said Jacob Frenkel, a Washington-based attorney at Dixon Law Firm and a former SEC official. Regulators want to know what his motives are for publishing it. "In addition, regulators are likely to keep a close eye on the deals that go on around these content. Chen Hui, a corporate compliance consultant and former attorney at the U.S. Department of Justice, also said regulators were interested in investigating whether there was evidence that Musk was deliberately or recklessly trying to manipulate the securities market.

The SEC declined to comment. Musk's lawyer did not respond to requests for comment.

Even so, several lawyers say the threshold for regulatory enforcement action is high.

Since Musk is not a Manchester United executive, his legal obligations to Manchester United shareholders are different from his legal obligations to Tesla shareholders, and there is no indication that he or anyone close to him has a significant financial interest in Manchester United shares. Earlier, due to a dispute over Tesla's privatization, Musk reached an agreement with the SEC requiring him to be subject to special legal scrutiny when commenting on Tesla. However, he still has plenty of leeway to comment on topics other than Tesla. Musk was also quick to clarify that the Manchester United reference was a joke, which clarified his intentions.

As a result, multiple lawyers argued that based on the information available, it was unlikely that the SEC would prove that Musk was attempting securities fraud.

Robert Frenchman, a partner at Mukasey Frenchman, said: "At least based on the facts we know, I think it is difficult to prove that Musk acted with deceptive intent. "

Others said Musk had also posted whimsical comments on Twitter, such as April Fool's Day jokes, teases about Tesla's bankruptcy, and topics about aliens and zombies. If regulators question United's content, his past publications can be used to defend himself. Howard Fisher, a partner at law firm Moses & Singer in New York, said defenders of Musk could argue that investors now know to be cautious about what Musk publishes.

So while Musk has previously been investigated for controversial content related to Tesla and Twitter, content about Manchester United is unlikely to turn the investigation into a hat trick.

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