US regulator denies ‘muzzling’ Elon Musk
The US Securities and Exchange Commission (SEC) has denied allegations that the regulator is harassing electric carmaker Tesla’s CEO, Elon Musk, with an investigation over his Twitter posts.
The probe dates back to 2018, when Musk tweeted about his intention to make Tesla private. The tweet briefly pushed Tesla’s stock price up more than 13%, but soon erased those gains, with shares sinking 11% below the pre-tweet close within 10 days.
The SEC filed fraud charges against Musk, while also requesting Musk’s resignation as board chairman and further approval of Musk’s tweets relating to Tesla. A month later, Musk and Tesla agreed to pay $20 million each in civil fines to settle the case. The money was supposed to go to Tesla’s investors. However, they filed a separate lawsuit against Musk, accusing him of posting a fraudulent announcement with wrongful intent, with a trial set for late May this year. Musk has repeatedly denied the allegations, stating that his tweet on privatizing Tesla was “entirely truthful.”
On Thursday, Musk’s lawyers sent a letter to US District Judge Alison Nathan in Manhattan accusing the SEC of trying to “muzzle” the CEO with their “endless” investigation over his Twitter posts.
“The SEC’s outsized efforts seem calculated to chill his exercise of First Amendment rights rather than to enforce generally applicable laws in an even-handed fashion,” the letter from attorney Alex Spiro stated, as cited by Reuters. The lawyer also questioned why the SEC still hasn’t distributed the combined $40 million in fines to Tesla shareholders, as was intended, although more than three years have passed after the settlement.
In a letter on Friday, however, Steven Buchholz from the SEC’s San Francisco Office stated that the regulator is not harassing Musk, but is merely doing what the court ordered it to do – to meet and confer before raising any compliance issues with the court.
“The Commission’s enforcement staff have, accordingly, sought to meet and confer with counsel for Tesla and Mr. Musk to address any concerns regarding Tesla and Mr. Musk’s compliance with the court’s amended judgments,” Buchholz wrote, also claiming that the regulator has followed court orders in distributing the settlement money and that the process is nearly finished.
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