Check out Elon Musk on Lex Fridman's podcast about how retail investors are fleeced by hedge funds.
In the conversation, Musk shed light on the SEC’s failure to protect retail investors from hedge funds that engage in short selling and market manipulation. According to Musk, the SEC has consistently turned a blind eye to the illegal activities of these hedge funds, despite their harmful impact on individual investors.
“Not once did the SEC go after any of the hedge funds who were nonstop shorting and distorting Tesla. Not once. The hedge funds would lie flat out on TV for their own gain at the expense of retail investors,” Musk said.
Musk believes that ‘the lawyers of the SEC are not paid well’ and seek to find lucrative job opportunities at top law firms. However, this creates a conflict of interest, as these law firms often employ hedge funds as clients.
“They know if they attack the hedge funds, they are affecting their future career prospects. So, they sell small investors down the river for their own careers. That’s what happens. Regulatory capture,” Musk added.