Ralph Nader says Tesla’s run-up should raise red flags at the SEC

Ralph Nader

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Ralph Nader
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Alex Wong/Getty

  • Ralph Nader, consumer rights advocate, said in a CNBC interview Wednesday that the SEC should investigate trading in Tesla stock for signs of misconduct.
  • Tesla shares have been on a wild ride to start the year: The stock price declined as much as 20% Wednesday. But by market close the day before, shares were up 112% versus the start of the year.
  • Nader also questioned the wisdom of Elon Musk’s compensation deal and said part of the run-up in Tesla’s share price had to do with investors closing out their short positions.
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Add Ralph Nader to the list of Tesla skeptics. He thinks the Securities and Exchange Commission should be too. In an interview with CNBC Wednesday, the consumer advocate said that Tesla’s share price performance – from dramatic surge to crushing blow – was eyebrow-raising. “I think the Securities and Exchange Commission should pay attention to the protection of investors here and look in to see whether there’s insider trading, potential market manipulating or even the ability to clear the transaction,” Nader said. Nader did not offer evidence of unlawful trading, but added that he felt Elon Musk’s pay package – which allows Musk to unlock a tranche of stock options as Tesla’s market value hits certain benchmarks – was ethically questionable, CNBC reported. Tesla shares fell by as much as 20.62% Wednesday. That was after closing Tuesday up 112% from the start of the year. “Tesla sold less than 400,000 vehicles last year and its valuation is greater than the combined valuation of Volkswagen and General Motors,” Nader said, adding that was a signal of speculative activity in the stock. The run-up could also be a symptom of investors covering their short positions, Nader said. A number of short-sellers, including Steve Eisman, have closed out their short positions after the stock’s performance made a short position difficult to maintain. The SEC declined Markets Insider’s request for comment. Tesla representatives could not be reached immediately for comment. Tesla shares

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Markets Insider