Twitter’s appointment of Elon Musk to its board this morning may very well inflame Musk’s already-tense relations with the Securities and Exchange Commission. Musk on Monday revealed a 9.2% stake in Twitter but filed as a passive shareholder, avoiding detailed financial disclosure that would have been required if he had filed as an investor interested in influencing management of the company.
The episode may raise numerous questions at the SEC, which recently proposed tightening the rules around when investors disclose stakes in companies to ensure the market is better informed. Among the questions that could be raised are when exactly Musk started buying shares, when he began discussions with Twitter CEO Parag Agrawal and what the two discussed. Agrawal today tweeted that “through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our board.” Another question is whether Musk missed a regulatory deadline for disclosing his stake.