When Mark Cuban calls, Elon Musk listens.
Within hours of rejecting a settlement offer from the U.S. Securities and Exchange Commission related to a charge that he misled Tesla investors, Musk received a phone call from Cuban that apparently led him to change his mind. Cuban called the Tesla founder late at night on September 27--at the request of one of Musk's lawyers--to try to persuade Musk to settle with the SEC, The Wall Street Journal reports.
Musk was facing charges that his August 7 tweet about having secured enough funding to take Tesla private was misleading. Musk's lawyer, Chris Clark, had also represented Cuban a decade ago on his own five-year legal battle with the SEC, over insider trading charges. Cuban won the suit in the end, but he warned Musk that a multiyear court fight "would take him away from managing his companies," according to the report.
"I explained where the SEC used questionable practices in my case, and how he could expect the same," Cuban told WSJ. "I asked him if he could name five people who had settled with the SEC, knowing he wouldn't be able to name any." Cuban and Tesla both declined to comment.
The SEC settlement--which has yet to be finalized--would force Musk to step down as Tesla's chairman for three years and pay a $20 million fine, though he would retain a seat on the company's board. Tesla also agreed to pay a $20 million fine.
On Thursday, U.S. District Judge Alison Nathan, who is tasked to approve the settlement, asked the SEC and Musk to write a joint letter to explain why the terms were "fair and reasonable" given the charges. The letter is due on October 11.