Tesla Inc. (TSLA) CEO Elon Musk has accused the Securities and Exchange Commission or SEC of purposely giving out information regarding a federal investigation in retaliation against his vocal critique of the federal financial bodies.
In a letter dated Monday sent to US District Judge Alison Nathan, Musk’s attorney Alex Spiro wrote: “It has become clearer and clearer that the Commission is out to retaliate against my clients for exercising their First Amendment rights, most recently by criticizing the Commission on the public docket and by petitioning this Court for relief.”
The letter was sent four days after Musk first alleged that the SEC was always troubling him by launching fresh investigations, curtailing his right to free speech among others. Musk also alleged that the SEC had not done its duties properly and had not remitted $40 million to shareholders, which the company and Musk paid in fines in settlement of securities fraud charges.
Musk’s lawyer did not give details about which investigation or what type of information may have been leaked and to whom. The letter also alleged that at least one member of the SEC had leaked “certain information regarding the investigation” without providing any supporting evidence.
The conflict between Musk and the SEC began in September 2018 when the latter charged Musk with making “false and misleading” statements to investors after he wrote on social media platforms in August that he had secured enough funding for a massive private buyout of Tesla at $420 a share. The stock went up and down the whole month and the deal never happened. Following the SEC allegations, Tesla had to pay $20 million in fines each, and Musk had to step down as chairman for at least three years as part of a revised settlement agreement the agency reached with the automaker and CEO in 2019. The company also has introduced a system for monitoring Musk’s statements to the public about the company whether be it on Facebook or Twitter.
Steven Buchholz, a member of the SEC, while replying to the earlier allegations said that the agency was working on the task of disbursing the $40 million to shareholders. He referred to the task as complex and said that SEC staff expects to submit a “proposed plan of distribution” to the court for approval by the end of March 2022.
Buchholz also wrote that ongoing communication with Tesla was what Nathan and the revised settlement agreement had called for, and that if Musk objected to any subpoena his attorneys should address that in a different motion. There’s a different federal statutory scheme for objecting to a subpoena, he added.
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