Photo: Ben Macmahon/AAP
The tense situation that exists between Tesla CEO Elon Musk and the Securities and Exchange Commission (SEC) continues to be saturated with new details. According to Musk, he is fighting against corruption in the state body and will expose them, ending the fight that he did not start.
The Musk-SEC standoff began in 2018 when a government agency ordered him to subject his Tesla posts to greater scrutiny as part of a settlement of claims that he misled investors by posting the company's privatization. As part of the settlement, Musk and Tesla each paid $20 million in investor compensation that year, totaling $40 million.
Last week, the head of Tesla accused US regulators of "an ongoing investigation" over his criticism of the government. Musk has spoken openly against the SEC on several occasions in the past. In a court filing dated February 17, he, through his lawyer, Alex Spiro, said that the SEC has engaged in outsized efforts to monitor the firm that "seem calculated to chill his exercise" of free speech.
Over the past three years, the SEC has repeatedly raised questions about whether Musk is violating the agreement. Regulators even took Tesla to court in 2021, asking for information about its management processes related to the order. In its actions, the SEC goes beyond its powers to conduct "serial investigations." These actions by the regulator repeatedly restricted Musk's freedom of speech, prompting him to file a legal letter.
In parallel to the continuing persecution of the head of Tesla, the SEC itself is in no hurry to fulfill its obligations, confirming its extremely suspicious behavior. So, for more than three years, since the payment of $40 million, the regulatory body has not even developed a final plan for distributing funds among investors. In response to this fact, brought to the attention of the court on February 17, the SEC announced that the distribution plan would be ready by the end of next month. For reference, the SEC was required to submit a distribution plan within 60 days of receipt of payment but did not do so even more than three years after that.
After Spiro filed a legal letter with all this information last week, Musk believes that the SEC leaked information from their investigation. This leak appears to be a reprisal against the CEO, Musk's lawyer expressed concern. Spiro did not name the employee who leaked the information.
"Upon information and belief, after I filed the February 17, 2022 letter to this Court regarding the Commission's conduct, at least one member of the SEC staff responded by leaking certain information regarding its investigation. This leak is emblematic of the vindictive, improper conduct that occasioned my letter: the SEC is retaliating against Mr. Musk and Tesla, without answering to the constraints of principle or law in so doing," the letter read.
In this case, we can observe the dishonorable actions of the SEC, which led to a response from Musk. According to some recent statements by the head of Tesla, he already has information that can expose the activities of the body and show that corruption is present there. "This is just peeling back the first layer of the corruption onion. Stay tuned…" Musk wrote regarding his letter against the SEC.
In a discussion that followed on Twitter, it emerged that Musk was "building a case" against the regulator. "Building a case is exactly what I've been doing," he wrote on February 23. With all this, it should be kept in mind that Musk is not the instigator of the conflict. He and Tesla paid a heavy price for speaking out about the company's privatization in 2018, but it seems that the SEC, which still did not distribute the money to investors, was still not happy and continued to restrict Musk. "I didn't start the fight, but I will finish it," he wrote in response to a tweet about where he was told that starting a fight with the SEC is not a great look.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.