Enlarge / Tesla CEO Elon Musk speaks to members of the media while departing from federal court in New York on Thursday, April 4, 2019. US District Judge Alison Nathan telegraphed her initial thoughts as the SEC and Elon Musk’s lawyers presented their arguments over whether the Tesla Inc. CEO should be held in contempt for tweets the agency says violated an earlier agreement. (credit: Getty Images | Bloomberg)
A lawyer for Tesla and CEO Elon Musk claimed in a court filing today that the US Securities and Exchange Commission is harassing the car company and Musk to “muzzle” his criticism of the government. The three-page letter from lawyer Alex Spiro to US District Judge Alison Nathan in New York said the SEC is “weaponizing” the 2018 settlement in which Tesla and Musk agreed to pay $20 million each in penalties to resolve the SEC’s complaint that “Musk’s misleading tweets” about taking Tesla private caused the stock price to jump “and led to significant market disruption.”
The settlement also required Tesla to impose controls on Musk’s social media statements. Musk had claimed on Twitter that he had “funding secured” to take Tesla private at $420 per share, but the SEC said in a lawsuit that “Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.”
Today’s letter said the SEC “has been weaponizing the consent decree by using it to try to muzzle and harass Mr. Musk and Tesla, while ignoring its Court-ordered duty to remit the $40 million that it continues to hold while Tesla’s shareholders continue to wait. Worst of all, the SEC seems to be targeting Mr. Musk and Tesla for unrelenting investigation largely because Mr. Musk remains an outspoken critic of the government; the SEC’s outsized efforts seem calculated to chill his exercise of First Amendment rights rather than to enforce generally applicable laws in evenhanded fashion.”
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