A federal judge on Monday ruled in a Securities and Exchange Commission (SEC) investigation into whether Elon Musk committed securities fraud when he bought up shares in Twitter (now Company X) ahead of his social media acquisition. , ruled that Elon Musk must testify. platform.
The judge's decision comes after a series of lawsuits between billionaires and regulators, but O'Leary Ventures chairman and “Shark Tank” star Kevin O'Leary , says this landmark ruling could change everything for companies.
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Appeared in FOX Business's “Big Money Show” Mr. O'Leary was asked whether companies should be incorporated in states other than Delaware. More than 60% of Fortune 500 companies (including Alphabet, Amazon, and CVS) are incorporated in Delaware due to its generous tax system. (If a company is registered in a state but does not do business there, it does not have to pay corporate taxes.)
“Absolutely, this changed everything as far as I was concerned,” O'Leary said. “Due to its stable policies, the traditional place of incorporation has always been Delaware. There has never been an incident like this where the intentions of the directors or the compensation of the audit committee were called into question.”
The “Shark Tank” star then explained how the ruling took Delaware “from the winning state column to the losing state column,” putting other states (New York, New Jersey, , Minnesota, Michigan, Massachusetts, and California) as “loser states.” ”
O'Leary defines these states as states with “highly volatile” business policies due to policies such as high startup fees and complex (and high) corporate and state taxes. O'Leary also reiterated that he was shocked that Musk would be investigated by the SEC since Twitter was incorporated in Delaware.
“My guess is that the Supreme Court will overturn this decision as soon as possible because everyone is looking at this and saying, 'What was that?' It just happened out of the blue.” he said.
Mr. O'Leary has defended Mr. Musk's business practices over Monday's ruling, but has clashed with Mr. Musk over company policies in the past.
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Last summer, Mr. O'Leary defeated Mr. Musk's decision to bring Tesla and X employees back to the office.
“The economy has fundamentally changed, and the problem with everyone having to work in an office is that you can't hire the best talent,” O'Leary said on Fox's “Outnumbered” in June. .
As of Friday morning, Mr. O'Leary's estimated net worth was $400 million.
