Members of Tesla’s board of directors are said to be lawyering up as crisis around Elon Musk deepens

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  • Some members of Tesla’s board of directors are reportedly hiring lawyers to protect themselves in the fallout from CEO Elon Musk’s declarations about taking the company private.
  • Fellow board members are also urging Musk to cool it with the public statements about a go-private deal, according to a New York Times story published Tuesday night.
  • By all appearances, Musk has ignored that advice.
  • In the days since he tweeted that a privatization deal was “funding secured,” the chief executive has only waded further into murky legal territory, seemingly hashing out the plan in real time on Tesla’s blog and on social media.
  • Tesla is now facing multiple lawsuits over this.

Some Tesla board members seem to be getting nervous while CEO Elon Musk publicly ruminates about taking his electric-car company private – so much so that some have hired attorneys to protect themselves from legal exposure, The New York Times reported Tuesday night.

Fellow board members are also said to be urging Musk to cool it with the social-media posts about a go-private deal. By all appearances, Musk has ignored that advice. The chief executive has talked out the plan on Tesla’s blog and on Twitter, even after the Securities and Exchange Commission said it was monitoring the situation.

It is unusual for the CEO of a publicly traded company to approach financial strategy the way Musk has in the past week. The company is now facing multiple lawsuits over this.

Musk’s online musings have rattled shareholders, and, according to The Times, that anxiety is most tangible among some on the board. Independent members have hired Paul, Weiss, Rifkind, Wharton & Garrison to address the emerging SEC inquiry, The Times said. A source familiar with the matter cited by the newspaper said the board thought the SEC matter could become a “full-blown investigation.”

Three directors have reportedly retained the law firm Latham & Watkins to assist them with an official proposal from Musk to take Tesla private.

The Times reported Monday that Musk’s first tweet about going private caught the board off guard.

Citing two people familiar with the internal response to Musk’s August 7 posting, The Times said that the tweet was sent “with little forethought” and that “some members of the board had been totally blindsided” by Musk’s move to announce the plan on Twitter.

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