Tesla CEO Accuses SEC Of Harassment, Curtailing His Right To Freedom

(RTTNews) - Tesla Inc. (TSLA) CEO Elon Musk on Thursday accused the Securities and Exchange Commission or SEC of harassing him as part of a calculated move to curtail his right to free speech in its oversight of his interactions with shareholders. This was part of a 2018 agreement, which had settled civil securities charges against the billionaire.

In a new court filing, Musk said that he thought settling the charges would end the agency's "harassment" and allow the court, not the agency, to monitor his obedience. However, Musk's lawyer wrote in the filing that the SEC had gone back on its promises, adding that the agency has been "weaponizing the consent decree by using it to try to muzzle and harass Musk and Tesla."

According to the court filing, the SEC has also still not distributed among the shareholders the $40 million that Musk and Tesla had paid as part of the 2018 settlement. Musk's lawyer said, "The SEC seems to be targeting Musk and Tesla for unrelenting investigation largely because 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 even-handed fashion." The letter follows a week after Tesla received news that the SEC had issued a new subpoena to the company in November of last year. As per reports, the financial regulator is finding out whether Musk and his auto company are complying with a revised settlement agreement that the SEC struck with them in 2019. According to Tesla's filing, the agency is seeking information on the company's "governance processes around compliance with the SEC settlement, as amended."

In September 2018, the SEC had charged Musk with making "false and misleading" statements to investors when he announced on Twitter that he had secured enough funding for a massive private buyout of Tesla at $420 a share. The company stock wax volatile full month and the deal Musk alluded to never materialized. Musk and Tesla had to each pay $20 million in fines and Musk was forced to step down as chairman for a period of three years.

Tesla also put in place a system for monitoring Musk's statements to the public about the company, whether on Twitter, blog posts or any other medium. The company also had to pay another $20 million fine, and appoint two independent directors to the board. One of them could be the chairman who replaces Musk, provided that person comes from outside Tesla and its affiliates. Under the deal's terms, Musk and Tesla have not admitted to the charges made by the regulators.