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Musk, Tesla Denied Hearing Over Alleged SEC ‘Harassment’ (2)

Feb. 24, 2022, 8:34 PM

Elon Musk and Tesla Inc. were denied a court hearing on their claims that the SEC is targeting them with an “unrelenting investigation” in retaliation for criticisms of the government.

U.S. District Judge Alison Nathan on Thursday said it wasn’t clear what the company and its chief executive officer were asking for in a Feb. 17 letter complaining that they were being targeted with “endless probes” by the regulator.

Musk and Tesla accused the Securities of Exchange Commission of using their settlements of suits over a series of 2018 tweets by Musk to “muzzle and harass” him and the company. They asked for a court conference on the regulator’s alleged failure to distribute $40 million in settlement funds while spending “energy and resources investigating Mr. Musk’s and Tesla’s compliance with the consent decree by issuing subpoenas unilaterally, without court approval.

The SEC denied the claims in a letter to the judge, saying that agency enforcement staff has been in touch with Musk and Tesla, seeking to address concerns over their compliance with the settlements.

“The defendants’ precise application to the Court is unclear,” Nathan said in a two-page order denying the request on Thursday, suggesting that they file a proper request with the court if they seek relief from the court.

The dispute is the latest in a continuing battle between the SEC and Musk over his Twitter posts claiming he had the funding and investor support to take the company private at $420 a share. The SEC alleged the tweets were false, and while Musk and Tesla didn’t admit wrongdoing in the accord, the agency set up a “fair fund,” with $20 million each from Musk and Tesla, to compensate company investors.

It was reported on Thursday that the SEC was investigating share sales last year by Musk and his brother Kimbal.

The cases are U.S. Securities and Exchange Commission v. Musk, 18-cv-08865; U.S. Securities and Exchange Commission v. Tesla, 18-cv-08947, U.S. District Court, Southern District of New York (Manhattan).

(Updates with SEC investigation into Musk stock sales. A previous version of this story corrected a reference to the number of SEC suits in third paragraph)

To contact the reporter on this story:
Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editors responsible for this story:
Katia Porzecanski at kporzecansk1@bloomberg.net

Anthony Lin

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