After Tesla CEO Elon Musk claims ‘unrelenting investigation’, SEC backs down

After Tesla CEO Elon Musk claims ‘unrelenting investigation’, SEC backs down

Elon Musk, CEO of Tesla Inc. , to members of the media as he leaves federal court in New York, US, on Thursday, April 4, 2019.

Natan Dvir | Bloomberg | Getty Images

The Securities and Exchange Commission submitted a letter to a federal judge on Friday in response to allegations by Tesla CEO Elon Musk said the agency “broke its promises” and engaged in a “pattern of behaviour.” reach the point of harassment after a previous settlement agreement.

In September 2018, the Securities and Exchange Commission charged musk By making “false and misleading” statements to investors after he announced via Twitter that he had secured funding to buy Tesla privately at $420 a share. After his tweets, Tesla’s stock entered a period of extraordinary volatility and Musk’s deal hinted that it would never materialize.

Tesla, Musk and the Securities and Exchange Commission entered into a revised settlement agreement in 2019 to settle the charges.

As part of the deal, Musk had to temporarily relinquish his role as chairman of Tesla’s board of directors and pay a $20 million fine individually. Tesla also had to pay a $20 million fine. Musk and Tesla agreed that the famous CEO would have the content of his social media posts approved by a securities law expert before they are published on events that contain material business information.

The $40 million they paid was supposed to be distributed to Tesla shareholders after that.

In a letter sent on behalf of Musk and Tesla to court Thursday, attorney Alex Spiro noted that the Securities and Exchange Commission had ignored its duty to transfer $40 million to Tesla shareholders.

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Stephen Buchholz of the Securities and Exchange Commission responded on Friday, saying the agency was making progress on this task, which was somewhat complex. He noted that Tesla had never expressed any concerns about this to the agency before and that Saudi Electricity Company employees expect to submit a “proposed distribution plan” to court for approval by the end of March 2022.

Spiro, Musk’s attorney, also noted that the Securities and Exchange Commission did not focus on the transfers because it was too busy investigating and issuing more subpoenas to Tesla. “The SEC appears to be targeting Mr. Musk and Tesla for a largely relentless investigation because Mr. Musk remains an outspoken critic of the government,” the attorney wrote.

Musk’s fights with regulators tend to be public and chaotic, and sometimes include vulgar taunts. The CEO has expressed his displeasure with the Securities and Exchange Commission on Twitter on multiple occasions, including at October 2018 When the agency called the “short enrichment committee”, and in July 2020 When he wrote: “SEC, three letters abbreviated, middle word is Elon.”

Spiro also suggested that the Securities and Exchange Commission’s continued investigative activity appeared to be “calculated to mollify” Musk’s First Amendment rights.

In a recent financial file for Fourth quarter of 2021Tesla revealed that it received a subpoena from the SEC late last year. “On November 16, 2021, the Securities and Exchange Commission issued a subpoena to us for information on our governance processes to comply with the SEC settlement, as amended,” the filings said.

The Securities and Exchange Commission (SEC) letter to the court on Friday argued that Tesla did not follow the appropriate procedures to challenge any subpoena issued by the agency as an independent regulator, regardless of court proceedings.

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