Telsa Inc says regulators are harassing Chief Executive Elon Musk over compliance with a 2018 regulatory agreement that sought to restrict his use of social media.
The Securities and Exchange Commission is conducting an “unfounded investigation” of Musk and Tesla, the company’s lawyers said Thursday in a letter filed with a federal judge who oversaw the settlement. Tesla revealed earlier this month that regulators sent a subpoena last year asking for information showing how the company and its CEO complied with the terms of the deal.
According to the letter, the SEC has also not distributed a $40 million fine to shareholders allegedly hurt by Musk’s 2018 tweet that he planned to take Tesla private. The SEC alleged that Mr Musk’s statements were not true. The regulator’s 2018 lawsuit ultimately led to an unusual settlement that Tesla’s lawyers would pre-empt some of the CEO’s tweets and other public statements.
Attorney Alex Spiro wrote in a letter to US District Judge Alison Nathan in Manhattan, “It appears that the SEC is targeting Mr. Musk and Tesla for continued investigation because Mr. Musk is an outspoken critic of the government.”
The SEC did not immediately respond to a request for comment.
Mr Spiro’s letter reveals that Tesla and Musk regret having settled and agreeing to a social-media oversight policy, which was approved by Judge Nathan. The company decided to settle the lawsuit because it believed the fine money would go to Tesla shareholders, it says.
“When Mr. Musk and Tesla agreed on consent decrees in 2018, Mr. Spiro wrote. “Mr. Musk and Tesla understand that a settlement with the SEC will end the SEC’s harassment and, important, make this court, not just the SEC, oversee any alleged compliance issues that lie ahead.”
The letter is not the first indication of how Musk and Tesla adhere to social-media policy. SEC lawyers informed Tesla in 2020 that Musk’s use of Twitter violated pre-approval policy twice, as The Wall Street Journal reported last year.
Of concern were tweets, including May 1, 2020, in which Mr. Musk said “Tesla’s stock price is too high,” using an acronym for “in my opinion.” Tesla shares fell after that tweet.
This story has been published without modification to the text from a wire agency feed
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