On Monday, a federal judge ruled that Elon Musk must testify in the U.S. Securities and Exchange Commission’s (SEC) probe that’s looking into whether or not Musk committed securities fraud when scooping up Twitter (now X) stock ahead of his acquisition of the social media platform.
Though the judge’s decision comes after a series of lawsuits between the billionaire and the regulatory agency, O’Leary Ventures Chairman and “Shark Tank” star Kevin O’Leary says that the landmark ruling could change everything for businesses.
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Appearing on FOX Business’ “The Big Money Show,” O’Leary was asked if businesses should be incorporated in states other than Delaware, where over 60% of Fortune 500 corporations — including Alphabet, Amazon, and CVS — are incorporated due to lenient tax policies. (Companies registered in the state that do not do business there do not have to pay corporate income taxes.)
“Absolutely, this changed everything as far as I’m concerned,” O’Leary said. “The traditional place to incorporate was always Delaware because of stable policy, we never had cases like this that questioned the will of directors or compensation of audit committees.”
The “Shark Tank” star then explained how the ruling takes Delaware “from the winner’s state column to the loser state column,” calling out other states — New York, New Jersey, Minnesota, Michigan, Massachusetts, and California — as “loser states.”
O’Leary defines these states as ones where business policies “are very unstable” due to high initiation fees, and complicated (and high) corporate and state taxes among other policies. O’Leary also reiterated that he was shocked Musk would be probed by the SEC since Twitter was incorporated in Delaware.
“I’m assuming the Supreme Court there will overturn this decision ASAP because everybody’s looking at this and saying ‘What was that?’ That was just right out of nowhere,” he said.
Though he’s defended Musk’s business practices over Monday’s ruling, O’Leary has clashed with the billionaire over corporate policies in the past.
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Last summer, O’Leary ripped Musk’s decision to have Tesla and X employees return to office.
“The economy has changed radically. The problem with saying everybody has to work in the office is you won’t be able to hire the best talent,” O’Leary said during an episode of FOX’s “Outnumbered” in June.
O’Leary’s estimated net worth as of Friday morning was $400 million.
