Hillicon Valley: SEC charges Elon Musk with fraud | New flaws found in voting machines | EU probing Amazon's copycat products | Salesforce to meet critics of government contracts

Hillicon Valley: SEC charges Elon Musk with fraud | New flaws found in voting machines | EU probing Amazon's copycat products | Salesforce to meet critics of government contracts
© Getty Images

Welcome to Hillicon Valley, The Hill's newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley.

Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Jacqueline Thomsen (@jacq_thomsen), and the tech team, Harper Neidig (@hneidig) and Ali Breland (@alibreland). And CLICK HERE to subscribe to our newsletter.

 

BREAKING – SEC THINKS ITS (F)ELON MUSK: The Securities and Exchange Commission is suing Tesla CEO Elon Musk according to a Manhattan court docket.

The suit alleges that Musk committed securities fraud. Shares of Tesla immediately dipped by roughly 4 percent after the news.

The SEC along with the Department of Justice began investigating the company after Musk tweeted earlier in the year that he had secured funding to take Tesla private at $420 a share.

ADVERTISEMENT

"Am considering taking Tesla private at $420. Funding secured." Musk tweeted in August.

The SEC concluded in its investigation that "[t]his statement was false and misleading."

The agency also charged that three other Musk statements that day about the company potentially going private were also misleading.

"Musk knew or was reckless in not knowing that each of these statements was false and/ or misleading because he did not have an adequate basis in fact for his assertions," the SEC wrote in its complaint.

"When he made these statements, Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a "special purpose fund," and had not confirmed support of Tesla's investors for a potential going- private transaction," it continued. 

Read more here.

 

YIKES: Voting machines used by election officials in more than half of the states in the U.S. contain a flaw that could allow hackers to access systems and change vote totals remotely.

A report created at the DefCon hacker conference detailed a security flaw in an older model of machines manufactured by Election Systems & Software LLC, the nation's leading election equipment seller, that allows hackers to exploit the machines remotely via a networking bug.

The Model 650 machines, which company representatives told The Wall Street Journal it ceased manufacturing in 2008, are used by precincts in more than half of the states across the country.

Other flaws affecting the Model 650 and other machines would require a hacker to gain physical access to voter machines with a device such as a thumb drive in order to alter votes. The 650 series, however, is vulnerable to two flaws that could also allow remote access, the report states.

Oregon Sen. Ron WydenRonald (Ron) Lee WydenCongress can retire the retirement crisis Dems accuse White House of caving to Trump's 'ego' on Russian meddling The difference between good and bad tax reform MORE (D) took aim at the company in an interview with the Journal, questioning company officials' commitment to improving election security in the face of the revealed issues.

"It's like going to a restaurant -- if the bathroom's dirty, you start to wonder what the kitchen looks like," he told the newspaper. 

Read more here.

 

EU ASKING ABOUT AMAZON PRODUCTS: European regulators probing Amazon over antitrust concerns are reportedly asking smaller merchants whether the internet giant has been copying their products and selling them under its own brand.

Bloomberg reported Thursday that EU antitrust enforcers have sent questionnaires to vendors that sell on Amazon's platform asking if the company has been selling products "identical or very similar" to their own and whether they've been hurt by such practices.

Margrethe Vestager, Europe's competition commissioner, revealed last week that her office had opened a preliminary inquiry into Amazon's market dominance.

"We are gathering information on the issue and have sent quite a number of questionnaires to market participants in order to understand this issue in full," Vestager said during a press conference.

Read more here.

 

SALESFORCE TO MEET WITH PROTESTORS OVER BORDER PATROL CONTRACTS: Salesforce has agreed to meet with activists to discuss its contracts with U.S. Border Patrol, according to Fight For the Future, a tech-focused advocacy group.

The company's agreement to meet with Fight For The Future came with the advocacy group agreeing to halt a demonstration in which the group projected messages during a concert at Salesforce's Dreamforce annual conference in San Francisco.

The messages urged concert-goers to contact Salesforce CEO Marc Benioff about the company's multimillion-dollar contract with U.S. Border Patrol, which Fight For the Future opposes.

Fight For the Future said that it would agree to the meetings if "Immigrants rights groups including Mijente and RAICES are invited to the meeting to represent directly affected communities."

Read more here.

 

HOUSE JUDICIARY ON THE MOVE: The head of the House Judiciary Committee on Thursday subpoenaed the Department of Justice (DOJ) for a series documents, including the memos of former FBI Deputy Director Andrew McCabeAndrew George McCabeThe Mueller report concludes it was not needed Ten post-Mueller questions that could turn the tables on Russia collusion investigators Electronic surveillance isn't spying — it's much more powerful MORE.

Committee Chairman Bob GoodlatteRobert (Bob) William GoodlatteTop Republican releases full transcript of Bruce Ohr interview It’s time for Congress to pass an anti-cruelty statute DOJ opinion will help protect kids from dangers of online gambling MORE (R-Va.) in a letter to Attorney General Jeff SessionsJefferson (Jeff) Beauregard SessionsForget the spin: Five unrefuted Mueller Report revelations Sessions: It's time to accept the results of the Mueller report and move on Trump poised to roll back transgender health protections MORE said his panel's request for the McCabe documents comes after previous document requests went unfulfilled.

Interest in the McCabe memos exploded last week after The New York Times published an article saying he documented Deputy Attorney General Rod RosensteinRod Jay RosensteinTrump denies ordering McGahn to oust Mueller Poll: Majority says Barr's summary of Mueller report was 'largely accurate' Heavy lapses in judgment are politicizing the justice system MORE talking to other officials about wearing a wire to record President TrumpDonald John TrumpForget the spin: Five unrefuted Mueller Report revelations Lara Trump: Merkel admitting migrants 'one of the worst things that ever happened to Germany' Financial satisfaction hits record high: survey MORE following the firing, and that Rosenstein also discussed the possibility of Cabinet officials invoking the 25th Amendment to remove the president from office last year.

Rosenstein and the Justice Department have disputed the Times story.

McCabe released a statement denying that he provided "information of any kind to the media" about events following the firing of FBI Director James ComeyJames Brien ComeySessions: It's time to accept the results of the Mueller report and move on Davis: The shocking fact that Mueller never would have accused Trump of a crime Sarah Sanders is entitled to her opinions, but not her own facts MORE, but he did not deny the existence of the memos cited by the times.

Goodlatte also subpoenaed supporting documents related to the FBI's application for a surveillance warrant on former Trump campaign aide Carter Page -- records that have long been sought by congressional Republicans.

Read more here.

 

AND: Former FBI general counsel Jim Baker is expected to meet with congressional investigators next week as part of a joint probe examining the decision-making of FBI and Justice Department (DOJ) officials during the 2016 election, The Hill has learned.

Baker's appearance on Capitol Hill is slated to take place Wednesday, a spokesperson for the House Judiciary Committee confirmed.

Read more here.

 

A LIGHTER TWITTER CLICK: Elon's got jokes.

 

NOTABLE LINKS FROM AROUND THE WEB:

How China systematically pries technology from U.S. companies. (The Wall Street Journal)

Facebook is giving advertisers access to your shadow contact information (Gizmodo)

It's Google's turn in Washington's glare. (The New York Times)

Study links restricting screen time for kids to higher mental performance. (Washington Post)