US securities agency denies claims it is harassing Elon Musk

Elon Musk, Tesla, SEC, Business
Elon Musk

US securities regulators have responded to allegations that they are harassing Elon Musk, insisting they are following a judge’s instructions in trying to speak with the Tesla CEO’s lawyers about his posts on Twitter about taking the company private.

Steven Buchholz of the US Securities and Exchange Commission’s (SEC) San Francisco Office wrote in a letter that the judge handling a securities case against Mr Musk encouraged both sides to confer before raising issues with the court.

He also denied that the agency had issued subpoenas in the Musk Twitter case and that the SEC is taking too long to distribute a 40 million dollar (£29 million) penalty from Mr Musk and Tesla that is supposed to go to Tesla shareholders.

Early on Thursday, lawyers for Mr Musk sent a letter to US district judge Alison Nathan in Manhattan, accusing the SEC of harassing him with investigations and subpoenas over his Twitter posts.

In 2018, Mr Musk and Tesla each agreed to pay 20 million dollars (£14.6 million) in civil fines over Mr Musk’s tweets about having the money to take the company private at 420 dollars (£308) per share.

The funding was far from secured and the company remains public. The settlement specified governance changes, including Mr Musk’s removal as board chairman, as well as approval of Mr Musk’s tweets.

The letter from attorney Alex Spiro accuses the SEC of trying to “muzzle” Mr Musk, largely because he is an outspoken government critic.

“The SEC’s outsized efforts seem calculated to chill his exercise of First Amendment rights rather than to enforce generally applicable laws in an even-handed fashion,” the letter stated.

Mr Spiro also questioned why the SEC has not distributed the 40 million dollars in fines to Tesla shareholders more than three years after the settlement.

Mr Buccholz wrote that during a 2019 contempt hearing, the judge encouraged the parties to make good faith efforts to meet before raising any compliance issues with the court.

“The Commission’s enforcement staff have, accordingly, sought to meet and confer with counsel for Tesla and Mr Musk to address any concerns regarding Tesla and Mr. Musk’s compliance with the court’s amended judgments,” Mr Buchholz wrote.

The SEC has followed court orders in distributing the settlement money and that process is nearing completion, his letter said.