Regulation
Elon Musk’s $56 Billion Tesla Pay Deal Struck Down Again: Details
A Delaware Court judge has once again rejected Elon Musk’s $56 billion pay package. The decision, issued by Judge Kathaleen McCormick, strikes down the compensation agreement despite shareholders’ attempt to “re-ratify” the deal. McCormick’s ruling follows a previous judgment in January, where the pay package was invalidated. The judge’s decision adds another layer to the ongoing legal battle, with Tesla expected to pursue an appeal.
Elon Musk’s $56B Tesla Compensation Deal Invalidated: Court Ruling Details
According to a Monday court filing, Judge Kathaleen McCormick has denied the tech company’s request to revise her earlier decision regarding Elon Musk’s pay package. The legal team for Tesla had argued that the recent shareholder vote to “re-ratify” the deal addressed the court’s concerns from the first ruling.
However, McCormick rejected this argument, citing that despite the vote, the pay package remained problematic.
The judge maintained that the CEO’s compensation deal was influenced by his power over the board of directors, leading to terms that were not “entirely fair.” In her opinion, Tesla had failed to ensure that investors were fully informed before agreeing to the pay package. McCormick reiterated that while the board could have chosen an appropriate amount of compensation, it capitulated to Elon Musk’s terms, which the court found to be excessive.
The judge added,
“There were undoubtedly a range of healthy amounts that the Board could have decided to pay Musk. Instead, the Board capitulated to Musk’s terms and then failed to prove that those terms were entirely fair.”
Moreover, the legal setback also carries a financial penalty for Tesla. In addition to the ruling on the compensation package, the court awarded the plaintiff’s attorneys a $345 million fee, which the tech company must pay in cash or shares.
In response, the Tech giant said,
“This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders.”
Tesla To Appeal Ruling At Delaware Supreme Court
Following McCormick’s decision, the tech company will appeal the ruling to the Delaware Supreme Court. The company had hoped that the re-ratification by shareholders would allow the deal to proceed, but McCormick’s decision has created additional legal hurdles.
A Delaware judge just overruled a supermajority of shareholders who own Tesla and who voted twice to pay @elonmusk what he’s worth.
The court’s decision is wrong, and we’re going to appeal.
This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware…
— Tesla (@Tesla) December 2, 2024
The decision also raises broader questions about corporate governance and executive compensation in the tech industry. The outcome of the appeal could set an important precedent for future cases involving large executive pay packages.
In other legal developments, the tech giant CEO filed a lawsuit against OpenAI and Microsoft, accusing the companies of engaging in anti-competitive practices. The lawsuit, filed in the U.S. District Court for the Northern District of California, claims that OpenAI’s shift to a for-profit model undermines competition in the AI sector. Elon Musk’s legal team argues that OpenAI, backed by a $13 billion investment from Microsoft, has been using its influence to suppress competitors, including xAI.
Despite the ongoing legal challenges surrounding his pay package, Musk experienced a positive outcome in a separate legal battle. A U.S. District Court judge recently ruled in Musk’s favor in a case involving the U.S. Securities and Exchange Commission (SEC). The SEC had sought to sanction Elon Musk over his handling of the X acquisition, but the court denied the request. The court noted that Elon Musk had already reimbursed the SEC for costs related to a missed meeting.
Ronny Mugendi
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Cryptocurrency investors in Japan are bracing for impact following a plan to reclassify digital assets as financial products. While the plan has elicited excitement from cryptocurrency enthusiasts in the Far East, the ambitious plan will have to scale several legislative hurdles.
Japan Targets Reclassification Of Cryptocurrencies As Financial Products
According to a report by Nikkei, Japan’s Financial Services Agency (FSA) is inching toward classifying cryptocurrencies as financial products. Per the report, the FSA intends to achieve the reclassification via an amendment to the Financial Instruments and Exchange Act.
Currently, digital assets in Japan are considered crypto assets conferred with property rights and seen as payment means. Under the FSA’s plans, cryptocurrencies in Japan will be treated as financial products in the same manner as traditional financial products.
The FSA says it will adopt a slow and steady approach toward the reclassification, carrying out “a private expert study group” to test the waters. If everything goes according to plan, the FSA will submit the amended bill to Parliament in early 2026.
The classification of cryptocurrencies as financial products will have far-reaching consequences for the local ecosystem. Experts say treating cryptocurrencies as financial products will bring Japan closer to a crypto ETF launch amid a changing regulatory landscape.
Furthermore, the move may lower current cryptocurrency taxation for local investors since existing capital market rules will apply to the asset class.
A Fresh Bill For Crypto Insider Trading Is Underway
Apart from the reclassification, the FSA disclosed plans for new legislation against insider trading. The move flows treating cryptocurrencies as financial products and will strengthen existing investor protection rules.
“It is a direction to establish a new insider trading regulation that prohibits trading based on unpublished internal information,” said the FSA. “We will develop laws to prevent unfair transactions.”
However, Japan’s cryptocurrency scene is heating up to a boil, driven by local and international players. Last week, stablecoin issuer Circle secured approval from the FSA for USDC with top exchanges set to list the stablecoin.
Japan’s Metaplanet has tapped Eric Trump to join its Strategic Board of Advisors as it continues to load up Bitcoin.
Aliyu Pokima
Aliyu Pokima is a seasoned cryptocurrency and emerging technologies journalist with a knack for covering needle-moving stories in the space. Aliyu delivers breaking news stories, regulatory updates, and insightful analysis with depth and precision. When he’s not poring over charts or following leads, Aliyu enjoys playing the bass guitar, lifting weights and running marathons.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
In what is being dubbed a major development in the crypto regulation space, the Governor of the US state of Kentucky, Andy Beshear, has signed the ‘Bitcoin Rights’ bill into law. The law promises to safeguard protections for Bitcoin (BTC) users.
Bitcoin Rights Bill Comes Into Effect
Crypto regulations continue to evolve under pro-crypto US President Donald Trump’s administration. In the latest development, Kentucky has become the newest state to enshrine protections for digital asset users.
In an X post published on March 24, crypto advocacy group Satoshi Action Fund announced that Governor Beshear had signed the much-anticipated Bitcoin Rights bill into law. The post stated:
The right to self-custody, run a node, and use of digital assets is now protected for millions of Americans without fear of discrimination.
The bill was first introduced to the Kentucky House by Rep. Adam Bowling on February 19. According to the bill’s description, it seeks to safeguard users’ rights to use digital assets and self-custody wallets. Additionally, it aims to prohibit local zoning changes that discriminate against crypto mining operations.
The legislation outlines guidelines for running a digital asset node and excludes digital asset mining from money transmitter license requirements. It also clarifies that crypto mining or staking is not considered an offer or sale of securities.
On February 28, the bill passed Kentucky’s House of Representatives with a unanimous vote of all 91 representatives in favor. It later passed the Kentucky Senate on March 13, receiving backing from all 37 senators.
Kentucky’s proactive stance toward cryptocurrencies isn’t new. Earlier this year, the state became the 16th US state to introduce legislation seeking to create a Bitcoin strategic reserve.
Meanwhile, neighboring state Arizona is also joining the crypto movement. A recent X post by Bitcoin Laws revealed that Arizona’s House Rules Committee has passed two Bitcoin reserve bills — SB1373 and SB1025. These bills will now head to a full floor vote.
Renewed Optimism Under Trump Administration
Following Trump’s victory in the November presidential election, cryptocurrency regulations in the US are evolving rapidly, with many states introducing legislation aimed at strengthening their digital asset ecosystems and attracting crypto businesses.
Positive changes in crypto regulations are encouraging industry businesses to expand. For instance, leading crypto trading platform Coinbase recently announced plans to hire 1,000 employees in the US.
The Trump administration has also witnessed several lawsuits being dropped against major crypto entities, including Kraken, Coinbase, Gemini, and others. At press time, Bitcoin trades at $87,399, down 0.2% in the past 24 hours.
Featured Image from Unsplash.com, chart from TradingView.com
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Hawk Tuah girl Hailey Welch, known for her association with the controversial $HAWK token, has been cleared of any wrongdoing after a lengthy investigation by the U.S. Securities and Exchange Commission (SEC). The SEC has decided not to press charges against Welch in connection with the rapid rise and subsequent collapse of the meme-based cryptocurrency.
US SEC Investigation Into Hawk Tuah Girl Concludes Without Charges
The SEC had launched an investigation into the $HAWK token after its dramatic price drop. The token, which was linked to Welch’s viral persona, initially saw a market cap surge to $490 million before crashing by over 90%. Investors who were impacted by the crash filed a lawsuit against those behind the project, alleging that the coin had been promoted and sold without proper registration.
Hawk Tuah girl Hailey Welch, who cooperated fully with the investigation, expressed relief after the SEC’s decision. “For the past few months, I’ve been cooperating with all the authorities and attorneys, and finally, that work is complete,” Welch told TMZ.
Her attorney, James Sallah, confirmed that the SEC had closed the case without any findings against her, adding that there would be no monetary sanctions or restrictions on Welch’s future involvement in cryptocurrency or securities.
This Is A Developing News, Please Check Back For More
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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