Demand Progress

Tell the SEC: No CEO is too big to fail

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    Tell the SEC: No CEO is too big to fail

    The settlement with Elon Musk creates a dangerous new doctrine, that a CEO is too big to fail. And he's already shown how little he respects that deal with his tweetstorm earlier this week. The SEC must reject this in future settlements and ensure that if a CEO breaks the rules, the punishment should include losing their job.

    During the Great Recession we learned how much damage can be done when government regulators treat banks as too big to fail.

    Now the Securities and Exchange Commission is rolling out a new theory: that CEOs can be too big to fail.

    When Elon Musk broke the rules, he should have lost his job as Tesla CEO. Instead the SEC let him stay on, claiming that Tesla needed Musk as CEO to survive. That's a radical new shift in the way government treats CEOs -- and seriously undermines efforts to rein in the power and wealth that CEOs still have.1

    Musk's own actions since the settlement prove that the SEC should have been tougher. Despite restrictions on his use of social media, Musk unleashed a new storm of tweets mocking the SEC earlier this week. He caused Tesla stock to fall again, wiping out $10 billion in value.2

    It doesn't look like Elon Musk is all that necessary to Tesla's future. If anything, his continued presence there is damaging consumers, the company, and its shareholders.

    The SEC was created to rein in corporate excess and show Wall Street and corporate America that they would have to follow the rules created.

    Tell the SEC: CEOs are not too big to fail.

    1. The New Republic, "Elon Musk and America’s Toxic Cult of the CEO," October 1, 2018.
    2. Forbes, "Tesla Stock Boomed After the SEC Deal. Then Elon Musk Tweeted. Now the Company Is Worth $10 Billion Less," October 9, 2018.