Elon Musk attacks SEC for “unrelenting” and “endless” investigation

Elon Musk attacks SEC for “unrelenting” and “endless” investigation
FILE PHOTO: Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. REUTERS/Aly Song/File Photo

The backstory:

  • Tesla Inc.’s Elon Musk is quite outspoken on social media, specifically Twitter.
  • His activity on Twitter regarding Tesla ranges from announcing that he’s going to take the company private and running polls for whether he should sell his Tesla shares. (This was the latest tweet that led to a subpoena).
  • He was sued in August of 2018 by The United States Securities and Exchange Commission (SEC) when he said funding was secured to potentially take his electric car company private at US$420 per share.
  • Tesla and Musk settled by agreeing to each pay US$20 million in civil fines and allowing Tesla lawyers to vet some of Musk’s communications in advance. Musk also stepped down as chairman. The SEC also set up a “fair fund” with US$20 million each from Musk and Tesla to repay the investors that Musk’s statements hurt.

The development

  • On Thursday, Musk wrote a letter accusing the SEC of harassing him and the company with an “endless" and “unrelenting" probe.
  • This letter was sent to US District Judge Alison Nathan in Manhattan, who presided over a 2018 SEC settlement about Musk’s going private tweet
  • This comes after Musk’s battle with regulators has recently escalated after scrutinizing Tesla’s treatment of workers, including accusations of discrimination.
  • In the same letter, one of Musk’s lawyers, Alex Spiro, also said “to address why the SEC has failed to distribute these funds to shareholders but has chosen to spend its energy and resources investigating Mr. Musk’s and Tesla’s compliance with the consent decree by issuing subpoenas unilaterally, without court approval.”
  • The judge has also previously raised questions about the status of a US$40 million “fair fund," and has asked for accounting statements in a December order.

You drive the stories at TMS. DM us which headline you want us to explain, or email us.