The Tesla chief claims the SEC is overstepping its boundaries.
Elon Musk isn’t backing down in his renewed fight against the Securities and Exchange Commission. According to Ars Technica, Tesla CEO Elon Musk has sought a federal court to dismiss a $20 million settlement with the Securities and Exchange Commission (SEC) reached in 2018 amid charges that the regulator bullied him into signing the agreement and overstepped its bounds. According to the memorandum of law provided to the court, Musk felt “forced” to sign the consent decree at a time when Tesla’s financial health was in jeopardy. In a statement, the EV executive also asserted that he stated the truth in tweets at the center of the debate, claiming that he was seriously considering taking Tesla private and had secured finance.
Musk also characterized the SEC’s approach as “governmental abuse.” Officials were allegedly using the agreement to police Musk’s First Amendment free speech rights by requiring that he pass tweets through an approved monitor who would determine what he could say. The SEC has also made compliance “more onerous” than the settlement originally demanded, Musk’s attorney argued. The Commission supposedly interpreted the consent decree as granting powers it didn’t previously have, letting it issue subpoenas and otherwise conduct “never-ending investigations.”
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Musk further called for an order determining that a November 2021 subpoena over insider trading allegations exceeded the SEC’s authority and was issued in “bad faith.” The Twitter poll in question was just meant to gather input, Musk claimed, and not a disclosure of information the exec would have to report to the SEC. The Commission is investigating whether or not Musk’s brother Kimbal was aware of the impending poll when he sold Tesla shares one day earlier.
The entrepreneur has routinely sparred with the SEC. He was teasing the agency mere days after announcing the 2018 settlement, and declared he could tweet what he wanted. Most recently, he and Tesla accused the SEC of mounting a “harassment campaign” to stifle his criticism of the government. The two contended the SEC couldn’t issue subpoenas without requiring court approval.
Musk might not want to count on victory, however. The court rejected the previous demands, arguing they weren’t specific enough. This latest effort is more focused, but it also hinges on the court accepting Musk’s version of events — and that’s far from guaranteed.
