Elon Musk has disclosed that the Securities and Exchange Commission (SEC) has issued a settlement demand in connection with its ongoing investigation into his 2022 acquisition of X (formerly Twitter).
The SEC is examining whether Musk violated securities laws by failing to disclose his stock purchases on the social media platform within the required timeframe.
Musk’s attorney, Alex Spiro, shared a letter on social media outlining the SEC’s demand that Musk agree to a fine or face multiple charges. The revelation marks the latest chapter in the ongoing clash between Musk and the regulatory agency.
According to the letter, SEC staff claimed that the demand was the result of a directive from higher-ups and warned that charges would be filed unless Musk complied. Musk has refused to acquiesce.
What to know
The ongoing battle between Musk and the SEC is nothing new. The two have clashed over several issues, especially during the Trump administration, but tensions have escalated in recent years.
- Musk has consistently challenged the SEC’s attempts to regulate his communications with investors, while Gensler has become an outspoken critic of cryptocurrencies—an area where Musk has significant investments and influence.
- The letter further revealed that Spiro had been subpoenaed to testify but refused and that the SEC had reopened an investigation into Musk’s brain-machine interface company, Neuralink.
- Spiro’s letter accused the commission of conducting a politically motivated campaign against Musk and his associates.
“We demand to know who directed these actions – whether it was you or the White House,” the letter stated, asserting that the SEC’s tactics would not intimidate Musk.
This dispute echoes the 2018 settlement between Musk and the SEC when the agency accused him of misleading investors with his tweet claiming he had “funding secured” to take Tesla private.
That settlement required both Musk and Tesla to pay $20 million each, and Musk agreed to have his tweets related to Tesla’s operations pre-approved by the company’s legal team. He also stepped down as Tesla’s chairman, though he retained his role as CEO.
More insights
Musk’s most recent clash with the SEC stems from his purchase of a 9% stake in Twitter in April 2022, ahead of his full acquisition of the company later that year.
- The SEC contended that Musk had violated securities laws by failing to disclose the purchase within the required 10-day window.
- Musk eventually acquired all of Twitter in a $44 billion deal, rebranding it as X shortly thereafter.
- Meanwhile, Musk and Gensler’s disputes extend beyond the SEC’s scrutiny of Musk’s business dealings. Gensler has been a vocal critic of cryptocurrencies, calling them “ripe with fraud, scams, and abuses.”
- Musk, on the other hand, has been one of the most prominent advocates for digital assets. However, Musk may soon face a change in leadership at the SEC.
- President-elect Donald Trump has nominated Paul Adkins, a long-time crypto advocate, to replace Gensler at the helm of the agency.
