Elon Musk is being harassed by the SEC, Tesla tells a federal judge
Telsa Inc. claims that regulators are harassing CEO Elon Musk over his adherence to a 2018 regulatory settlement aimed at limiting his usage of social media.
The Securities and Exchange Commission is launching “unfounded investigations” into Mr. Musk and Tesla, according to Tesla’s attorneys, who filed a letter with the federal judge overseeing the deal on Thursday. Tesla said earlier this month that last year, regulators issued a subpoena for information on how the firm and its CEO followed the conditions of the agreement.
According to the letter, the SEC hasn’t disbursed $40 million in fine money to shareholders who were allegedly harmed by Mr. Musk’s 2018 tweets suggesting he planned to take Tesla private. Mr. Musk’s statements were alleged to be false by the SEC. Following the regulator’s lawsuit in 2018, Tesla lawyers agreed to pre-approve portions of the CEO’s tweets and other public statements.
In a letter to U.S. District Judge Alison Nathan in Manhattan, attorney Alex Spiro wrote, “The SEC appears to be targeting Mr. Musk and Tesla for unrelenting inquiry partly because Mr. Musk remains an outspoken critic of the government.”
A request for comment from the SEC was not immediately returned.
Mr. Spiro’s letter implies that Tesla and Mr. Musk are resentful of Judge Nathan’s approval of the social-media control programme. According to the corporation, it opted to settle the lawsuit because it assumed that the fine money would be distributed to Tesla shareholders.
“In 2018, when Mr. Musk and Tesla consented to the consent decrees, Tesla was a less mature firm,” says the report “Mr. Spiro penned a letter. “Mr. Musk and Tesla recognised that reaching an agreement with the SEC would finally put an end to the SEC’s harassment and, more crucially, make this court, not the SEC alone, the monitor over any future apparent compliance difficulties.”
The letter isn’t the first sign of discontent with Mr. Musk and Tesla’s handling of social media strategy. According to The Wall Street Journal last year, SEC attorneys warned Tesla in 2020 that Mr. Musk’s use of Twitter had twice breached the preapproval policy.
Tweets from Mr. Musk, such as one from May 1, 2020, in which he remarked, “Tesla’s stock price is too high imo,” an abbreviation for “in my opinion.” Tesla’s stock dropped after that tweet.