May 19, 2022

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US SEC to Elon Musk: Regarding your tweets, the deal is a deal

US SEC to Elon Musk: Regarding your tweets, the deal is a deal

NEW YORK (Reuters) – The largest US securities regulator on Tuesday urged a federal judge not to allow Elon Musk to evade an agreement to monitor his use of Twitter, Tesla Inc. said. (TSLA.O) The CEO is part of a harassment campaign.

In a lawsuit in federal court in Manhattan, the US Securities and Exchange Commission said Musk did not bear the “heavy burden” of repealing the 2018 consent decree requiring Tesla’s lawyers to approve tweets and other public statements that may be material to him. cars Company.

It’s not enough that Musk found compliance “less favorable than he had hoped,” or wished the Securities and Exchange Commission would stop investigating Tesla’s disclosure actions.

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“When it comes to civil settlements, the deal is a bargain, in the absence of more compelling circumstances than what is presented here,” the Securities and Exchange Commission said.

The regulatory agency also urged US District Judge Alison Nathan, who is overseeing the ordinance, to reject Musk’s attempt to overturn a subpoena requesting records related to his Twitter poll last November about whether he would sell 10% of his Tesla stock.

Musk’s attorney, Alex Spiro, declined to comment. Tesla did not immediately respond to a request for comment. Legal experts said it was unlikely that Musk would rescind the decree.

Earlier on Tuesday, Musk danced and joked with fans as he supervised the opening of Tesla’s first European factory, near Berlin, in the presence of German Chancellor Olaf Schulz. Read more

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Tesla also has a factory in Shanghai. The company has made Musk the richest person in the world, according to Forbes magazine.

The SEC dispute stems from the regulator’s claim that Musk defrauded investors on August 7, 2018, by tweeting that he had obtained “secured financing” in order to turn his electric car company private at a higher price, when in reality the acquisition was not close.

Both Tesla and Musk settled a civil fine of $20 million, with Musk stepping down as Tesla’s president.

Musk has since accused the Securities and Exchange Commission of harassing him with “roving and unfettered” investigations, in a bad faith attempt to punish him for criticizing the government and exercising his constitutional right to free speech under the First Amendment. Read more

But the Securities and Exchange Commission said it has broad authority and a “legitimate purpose” to investigate Musk and Tesla, and that Musk can only oppose the subpoena through an executive subpoena.

The SEC said Musk was complaining about the “huge number of demands” by the Securities and Exchange Commission from 2018 to the present, which he described as harassment.

“However, Musk’s chronology of the alleged demands is disappointing and reflects legitimate investigations into possible new behavior of abuse by Tesla and Musk,” she added.

The subpoena related to Musk’s tweet that he will dump 10% of his stake in Tesla if users agree to this.

The majority did, and the poll caused Tesla’s stock price to plummet. Since then, Musk has sold more than $16 billion in Tesla stock.

(Jonathan Stemple reports) in New York. Additional reporting by David Shepardson in Washington, D.C., Hyun Joo Jin in San Francisco, Victoria Waldrusy and Nadine Shemrushek in Gruenheide, Germany; Editing by Jonathan Otis

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