US SEC to Elon Musk: Regarding your tweets, a deal is a deal | Investment News

NEW YORK (Reuters) – The top U.S. securities regulator on Tuesday urged a federal judge not to let Elon Musk escape an agreement requiring his use of Twitter to be monitored, which the chief executive of Tesla Inc considers part of of a harassment campaign.

In a filing in federal court in Manhattan, the U.S. Securities and Exchange Commission said Musk had failed in his “heavy burden” to overturn a 2018 consent decree requiring Tesla lawyers to approve tweets and other public statements that might be important to his electric. car company.

It’s not enough that Musk found compliance “less practical than he had hoped” or that he wished the SEC would stop investigating Tesla’s disclosure procedures.

“As far as civil settlements are concerned, an agreement is an agreement, absent circumstances far more compelling than those presented here,” the SEC said.

The regulatory agency also urged U.S. District Judge Alison Nathan, who is overseeing the executive order, to reject Musk’s bid to quash a subpoena seeking documents relating to his Twitter poll last November on whether to sell 10% of its Tesla shares.

Alex Spiro, an attorney for Musk, declined to comment. Tesla did not immediately respond to a request for comment. Legal experts said Musk was unlikely to overturn the executive order.

Earlier on Tuesday, Musk danced and joked with fans as he oversaw the opening of Tesla’s first European factory, located near Berlin, with German Chancellor Olaf Scholz in attendance.

Tesla also has a factory in Shanghai. The company made Musk the richest person in the world, according to Forbes magazine.

The dispute with the SEC stems from the regulator’s claim that Musk defrauded investors on August 7, 2018, by tweeting that he had “secure funding” to potentially take his electric car company private at a high price, while in reality a takeover was not close.

Tesla and Musk settled by each paying a $20 million civil penalty, with Musk stepping down as Tesla chairman.

Musk has since accused the SEC of harassing him with “wandering and unrelated” investigations, in a bad faith effort to punish him for criticizing the government and exercising his constitutional right to free speech under of the first amendment.

But the SEC said it had broad authority and a “legitimate purpose” to investigate Musk and Tesla, and that Musk could only oppose the subpoena through subpoena enforcement action.

“Musk complains about the SEC’s ‘large number of requests’ from 2018 to present, which he calls harassment,” the SEC said.

“But Musk’s own timeline of the alleged demands is both disappointing and reflects legitimate investigations into potentially violent new conduct by Tesla and Musk,” he added.

The subpoena related to Musk’s tweet that he would dump 10% of his stake in Tesla if users approved it.

A majority did, and the poll sent Tesla’s stock price plummeting. Musk has since sold more than $16 billion worth of Tesla stock.

(Reporting by Jonathan Stempel in New York; Additional reporting by David Shepardson in Washington, DC, Hyun Joo Jin in San Francisco, and Victoria Waldersee and Nadine Schimroszik in Gruenheide, Germany; Editing by Jonathan Oatis)

Copyright 2022 Thomson Reuters.

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