Elon Musk, chief executive officer of Tesla Inc., speaks to members of the media upon departure from federal court in New York, U.S., on Thursday, April 4, 2019.
Natan Dvir | Bloomberg | beautiful pictures
The Securities and Exchange Commission filed a letter with a federal judge on Friday responding to the allegations of Tesla CEO Elon Musk that the company “broken its promise” and engaged in a “pattern of behavior” amount for harassment after a previous settlement.
In September 2018, SEC charge Musk with making “false and misleading” statements to investors after he announced via Twitter that he had secured funding for an individual Tesla acquisition for $420 a share. promissory note. Following his tweets, Tesla stock entered a period of extraordinary volatility and the deal Musk hinted at would never materialize.
Tesla, Musk, and the SEC eventually reached a revised settlement in 2019 to settle the allegations.
As part of the settlement, Musk had to temporarily step down from his role as Tesla’s chairman of the board and pay a $20 million fine. Tesla also had to pay a fine of $20 million. Musk and Tesla have agreed that the celebrity-CEO will have the content of his social media posts approved by a securities law expert before publishing them on occasions with important business information. important.
The $40 million they paid was supposed to be split among Tesla shareholders afterward.
In a letter to the court on behalf of Musk and Tesla on Thursday, attorney Alex Spiro alleges that the SEC ignored its obligation to pass on that $40 million to Tesla shareholders.
The SEC’s Stephen Buchholz responded Friday, saying that the agency is indeed making progress on that task, which is quite complicated. He noted that Tesla has never expressed any concerns about this to the agency before, and that SEC staff are expected to submit a “proposed distribution plan” to the court for approval. at the end of March 2022.
Musk’s attorney, Spiro, also argued that the SEC wasn’t focused on transferring the funds because they were too busy investigating and issuing multiple subpoenas to Tesla. The attorneys wrote, “The SEC appears to be targeting Mr. Musk and Tesla for ongoing investigations in large part because Mr. Musk remains an outspoken critic of the government.”
Musk’s battles with regulators tend to be overt and messy, sometimes including vulgar taunts. The CEO has expressed his displeasure with the SEC on Twitter several times, including in October 2018 when he called the agency “shortsman’s enrichment commission”, and in July 2020 when he wrote: “SEC, three letter abbreviation, middle word for Elon’s.”
Spiro also suggested that the SEC’s ongoing investigation appears to be “calculated to chill” Musk’s First Amendment rights.
In a recent financial filing for 4th quarter of 2021Tesla revealed that it received a subpoena from the SEC late last year. The filing said: “On November 16, 2021, the SEC issued a subpoena to us seeking information about our governance processes around compliance with the SEC settlement, such as has been modified.”
The SEC’s letter to the court on Friday alleges that Tesla failed to follow proper procedures to challenge any subpoenas the agency has issued as an independent regulator, in addition to court proceedings.
