Tesla is stuck in the crossfire.
The situation between the SEC, Elon Musk, and Tesla appears to be escalating after a lawyer for Musk reached out to the court with some serious allegations about some kind of vendetta that they claim the Security and Exchange Commission has against them.
Musk and the SEC have had a few run-ins with each other, rarely with a good outcome. Most famously, the SEC filed a lawsuit against Musk over his infamous “funding secured” comment regarding his failed attempt to take Tesla private back in 2018.
The Security and Exchange Commission (SEC) judged that Musk exaggerated when saying that the funding was “secured”:
Musk went on a campaign against the SEC, calling them names and claiming that they were working for people shorting the electric automaker. But ultimately, Tesla and Musk ended up reaching a settlement with the SEC.
As part of the settlement, Musk agreed to step down from the role of chairman of the board, and both Tesla and Musk had to each pay $20 million in fines.
The CEO presumably didn’t want Tesla to have to pay for his issue with the SEC. While he couldn’t directly pay for Tesla’s part of the fine, he decided to buy $20 million worth of shares from Tesla. That way, he sort of indirectly ended up paying for Tesla’s fine – though he also ended up with ~71,000 additional Tesla shares in the process.
As we previously reported, Musk ended up actually making money from the settlement due to Tesla’s stock price surging.
Another part of the settlement was that Musk and Tesla had to agree for the former to have his tweets reviewed by the latter’s legal department if they are material to the company. Despite the settlement, Musk didn’t change his use of his popular Twitter account with over 74 million followers and has remained defiant when it comes to the SEC.
As for the SEC, it reportedly sent several inquiries to Tesla about Musk’s use of Twitter when it relates to potentially material information.
Last week, Alex Spiro, a lawyer for Musk, sent a letter to the court to request an audience to discuss what he described as the SEC’s “harassment” of Tesla and Musk. He also claims that the SEC has yet to distribute the $40 million settlement money to shareholders.
The SEC quickly denied the allegations of harassment and claimed that a plan for distributing the money was going to be submitted to the court next month and the delay is due to the complexity.
But then Spiro claimed this week that the SEC leaked information about an ongoing investigation in reprisal to him contacting the court.
Now Musk himself has commented on the back and forth and he is not mincing his words.
The CEO says that he has been building a case against the agency:
Then he ramped it up a notch and said that he “didn’t start the fight,” but he plans on “finishing it”:
He didn’t elaborate on how he plans on finishing the fight, but the back and forth between Musk’s lawyer and the SEC are expected to lead to a new audience with the court.