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SEC Rebuts Elon Musk’s Claim That Agency Is Targeting Him (1)

Feb. 19, 2022, 2:10 AM

The U.S. Securities and Exchange Commission denied it’s targeting Tesla Inc. Chief Executive Officer Elon Musk with endless probes, as he claimed in a letter to a judge earlier this week.

The SEC reached settlements with Musk and Tesla in September 2018 after suing Musk over his infamous “funding secured” tweets in which he claimed to have investor support for taking Tesla private at $420 a share.

This month, Tesla disclosed in a regulatory filing that on Nov. 16 the agency sought information about the company’s governance processes and compliance with the settlements.

Alex Spiro, Musk’s outside counsel, claimed in a letter to U.S. District Judge Alison Nathan that the agency was targeting Musk and the electric car maker with “unrelenting investigation” because the CEO is “an outspoken critic of the government.” He said the commission issued subpoenas without court approval.

The SEC responded Friday, with its lawyer Steven Buchholz writing to the judge that the commission’s enforcement staff have sought to discuss any concerns about the settlement with Tesla and Musk’s attorneys.

“Mr. Spiro’s letter incorrectly implies that the Commission staff have issued subpoenas in this litigation,” Buchholz said. “That simply is not true-- the Commission staff have not issued any subpoenas in this litigation. If Tesla and Mr. Musk have legitimate objections with the SEC’s processes outside this litigation, they should pursue those objections in the appropriate forum.”

Musk also claimed the SEC failed to pay Tesla shareholders $40 million the agency collected in the 2018 settlements over his tweets.

Buchholz said in his letter that it has taken time to develop a plan given the complexity of the distribution and it plans to submit one to the judge by the end of March.

Musk Says SEC Is Out to ‘Muzzle and Harass’ Him and Tesla

(Updates with distribution plan in final paragraph.)

To contact the reporter on this story:
Dana Hull in San Francisco at dhull12@bloomberg.net

To contact the editors responsible for this story:
Chester Dawson at cdawson54@bloomberg.net;
Katia Porzecanski at kporzecansk1@bloomberg.net

Joe Schneider

© 2022 Bloomberg L.P. All rights reserved. Used with permission.