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 calculated effort to “chill” his right to free speech in its control of his contacts with shareholders.
Musk and Tesla believed that settling the charges would end 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. “Unfortunately, the SEC has failed to keep its promises,” wrote the writer, adding that the agency has been “weaponizing the consent decree by using it to try to silence 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 fined Musk and the company as part of the 2018 settlement.
“The SEC appears to be targeting Mr. Musk and Tesla for an unrelenting investigation 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 case against him. “Rather than implementing generally applicable laws in an even-handed way, the SEC’s outsized efforts appear calculated to limit his exercise of First Amendment rights.”
The letter came 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 banking regulator is trying to assess if Musk and Tesla followed the terms of a revised settlement deal reached in 2019. The SEC is seeking details on Tesla’s “governance processes around compliance with the SEC settlement, as modified,” according to the company’s filing.
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 shares. They voted in favor. However, a large amount of the sales that followed the Twitter poll were part of the strategy Musk launched in September.