Musk and Tesla believed that settling the charges would cease the agency's "harassment" of Musk and allow the court to monitor his compliance rather than the agency, according to a new court filing by Musk's lawyer on Thursday.
As part of a 2018 agreement that settled civil securities charges against the billionaire, Tesla CEO Elon Musk accused the Securities and Exchange Commission of harassment in a premeditated effort to "chill" his right to free expression in its control of his contacts with shareholders.
Musk and Tesla believed that settling the charges would cease the agency's "harassment" of Musk and allow the court to monitor his compliance rather than the agency, according to a new court filing by Musk's lawyer on Thursday. "However, the SEC has failed to keep its commitments," he wrote, adding that the agency has been "weaponizing the consent decree by attempting to gag and harass Mr. Musk and Tesla."
According to the filing, which wants a hearing on the case, the agency hasn't yet given to shareholders the $40 million penalized Musk and the firm as part of the 2018 settlement.
"The SEC appears to be targeting Mr. Musk and Tesla for an unrelenting inquiry partly because Mr. Musk remains an outspoken critic of the government," wrote Alex Spiro, a lawyer for Musk and Tesla, in the new filing, which seeks to end the SEC's 2018 securities lawsuit against him. "Rather than enforcing generally applicable statutes in an evenhanded manner, the SEC's outsized efforts appear geared to limit his exercise of First Amendment rights."
The letter arrives more than a week after Tesla announced that the Securities and Exchange Commission (SEC) has issued a new subpoena to the company in November 2021.
The SEC is attempting to assess if Musk and Tesla followed the terms of a revised settlement deal reached with them in 2019. The agency is looking for details on Tesla's "governance systems regarding compliance with the SEC settlement, as modified," according to the company's petition.
The subpoena was issued shortly after the celebrity CEO asked his tens of millions of Twitter followers if he should sell 10% of his Tesla stock. They voted in favor. However, a large number of the sales that followed the Twitter vote were part of Musk's September 2021 plan.
When Musk declared on Twitter in August that he had secured enough funds for a major private buyout of Tesla for $420 a share, the SEC sued him for making "false and misleading" claims to investors. The stock fluctuated throughout the month, and the deal Musk hinted at never occurred.
As part of the arrangement, Musk and Tesla each had to pay $20 million in fines, and Musk had to step down as chairman for at least three years. Tesla also needed to set up a system to track Musk's public utterances regarding the firm, whether through Twitter, blog postings, or any other medium.
Tesla was also required to pay a $20 million fine and install two independent directors to its board of directors. One of them might be the new chairman, assuming he or she comes from outside of Tesla and its subsidiaries. Musk and Tesla are not required to admit or dispute any misconduct by authorities under the terms of the agreement.
A request for comment from the SEC was not immediately returned.
Musk filed the lawsuit on Thursday, just hours after he shared a meme comparing Canadian Prime Minister Justin Trudeau to Adolf Hitler. It was in response to a report that Canadian authorities were looking into bitcoin donations to support a weeks-long anti-vaccine protest.
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Tesla CEO Elon Musk accused the Securities and Exchange Commission of attempting to 'chill' his right to free expression.
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Musk and Tesla believed that settling the charges would cease the agency's "harassment" of Musk and allow the court to monitor his compliance rather than the agency, according to a new court filing by Musk's lawyer on Thursday.
As part of a 2018 agreement that settled civil securities charges against the billionaire, Tesla CEO Elon Musk accused the Securities and Exchange Commission of harassment in a premeditated effort to "chill" his right to free expression in its control of his contacts with shareholders.
Musk and Tesla believed that settling the charges would cease the agency's "harassment" of Musk and allow the court to monitor his compliance rather than the agency, according to a new court filing by Musk's lawyer on Thursday. "However, the SEC has failed to keep its commitments," he wrote, adding that the agency has been "weaponizing the consent decree by attempting to gag and harass Mr. Musk and Tesla."
According to the filing, which wants a hearing on the case, the agency hasn't yet given to shareholders the $40 million penalized Musk and the firm as part of the 2018 settlement.
"The SEC appears to be targeting Mr. Musk and Tesla for an unrelenting inquiry partly because Mr. Musk remains an outspoken critic of the government," wrote Alex Spiro, a lawyer for Musk and Tesla, in the new filing, which seeks to end the SEC's 2018 securities lawsuit against him. "Rather than enforcing generally applicable statutes in an evenhanded manner, the SEC's outsized efforts appear geared to limit his exercise of First Amendment rights."
The letter arrives more than a week after Tesla announced that the Securities and Exchange Commission (SEC) has issued a new subpoena to the company in November 2021.
The SEC is attempting to assess if Musk and Tesla followed the terms of a revised settlement deal reached with them in 2019. The agency is looking for details on Tesla's "governance systems regarding compliance with the SEC settlement, as modified," according to the company's petition.
The subpoena was issued shortly after the celebrity CEO asked his tens of millions of Twitter followers if he should sell 10% of his Tesla stock. They voted in favor. However, a large number of the sales that followed the Twitter vote were part of Musk's September 2021 plan.
When Musk declared on Twitter in August that he had secured enough funds for a major private buyout of Tesla for $420 a share, the SEC sued him for making "false and misleading" claims to investors. The stock fluctuated throughout the month, and the deal Musk hinted at never occurred.
As part of the arrangement, Musk and Tesla each had to pay $20 million in fines, and Musk had to step down as chairman for at least three years. Tesla also needed to set up a system to track Musk's public utterances regarding the firm, whether through Twitter, blog postings, or any other medium.
Tesla was also required to pay a $20 million fine and install two independent directors to its board of directors. One of them might be the new chairman, assuming he or she comes from outside of Tesla and its subsidiaries. Musk and Tesla are not required to admit or dispute any misconduct by authorities under the terms of the agreement.
A request for comment from the SEC was not immediately returned.
Musk filed the lawsuit on Thursday, just hours after he shared a meme comparing Canadian Prime Minister Justin Trudeau to Adolf Hitler. It was in response to a report that Canadian authorities were looking into bitcoin donations to support a weeks-long anti-vaccine protest.
-CNBC’s Lora Kolodny contributed to this report.-