The New York Times fired Perplexity a “cease and desist” notice demanding the company stop using the newspaper’s content for generative AI purposes, the startup said on 15 October, marking the latest clash between the news publisher and an AI firm, Reuters learnt.
Tesla’s Elon Musk Relinquishes Chairman Role In SEC Settlement
The settlement between SEC and leading electric car manufacturer Tesla’s Elon Musk, has concluded with him losing his role as chairman of the board for a minimum of three years and as well as having to pay a fine of US$20 million. Although he will still retain his position as CEO. The SEC has also imposed a $20 million fine on Tesla, which is expected to appoint two new independent directors to the board and instill stricter governance policies.
This brings to end the issues of fraud that was stirred when Musk made a Twitter announcement that he would be gearing Tesla towards a private buyout although this was not confirmed. As said by regulators, “Musk tweeted on August 7, 2018 that he could take Tesla private at $420 per share — a substantial premium to its trading price at the time — that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote,”. However, “in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies. Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact,” they added.
In a statement released by SEC Chairman, Jay Clayton, he has further enforced that disclosure-based federal securities laws should be strictly adhered to and has said that, “Specifically, when companies and corporate insiders make statements, they must act responsibly, including endeavoring to ensure the statements are not false or misleading and do not omit information a reasonable investor would consider important in making an investment decision”.
Following this settlement, Tesla’s stocks which had initially surged by six percent after Musk’s Twitter announcement, has fallen according to trading insides from NASDAQ, and closed at approximately 14 percent on 28 September at US$264. A downward trend that is also reflected in the company’s bonds which has dropped significant and could potentially lead the company to be US$1.3 billion in debt by March 2019.
In a New York Times interview last month, Musk had revealed an “excruciating” personal turmoil in having to run the company amid high staff and executive turnovers, which led to initial talks of Tesla seeking to getting him a second-in-command. However, following Tesla and Musk’s recent settlement with SEC, Musk is expected to face greater disclosure controls regarding his use of social media and regulators have recommended that Tesla’s board “oversee” its founder’s external communications with investors.
As said by Steven Peikin, co-director of SEC’s Enforcement Division, “The resolution is intended to prevent further market disruption and harm to Tesla’s shareholders”.
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