Elon MuskAlex Spiro, a lawyer for Elon Musk claims that the SEC is targeting Musk. What do you think?

The Tesla and SpaceX CEO Elon Musk has a history of courting controversy and promoting his companies on the Twitter platform while dismissing some SEC rules.

In September 2018, the Securities and Exchange Commission charged Musk with making “false and misleading” statements to investors when he announced via Twitter in August that year he was considering taking Tesla private at US$420 a share and had funding secured. Shares of the electric vehicle maker seesawed for weeks after that and the deal Musk alluded to never materialized.

Musk and Tesla eventually agreed to a settlement with the government and revised it in 2019. Under its terms, Musk and Tesla each had to pay US$20 million in fines to the SEC, and Musk had to temporarily relinquish his role as chairman of the company’s board.

In June 2020, the SEC said Musk violated some terms of the agreement that required the CEO to have tweets pre-approved if they contained material business information about Tesla likely to affect the share price. Musk had tweeted that Tesla’s stock price was too high, which sent the shares down. Earlier this year, the SEC subpoenaed Musk and Tesla after he informally polled his tens of millions of Twitter followers, asking if he should sell 10% of his Tesla holdings. The majority of his followers voted yes. This month, Tesla disclosed in a regulatory filing that on Nov 16 the agency sought information about the company's governance processes and compliance with the settlements.  

The previous week on Thursday, Elon Musk accused the U.S. SEC of harassing them with an "endless" and "unrelenting" investigation to punish Musk for being an outspoken critic of the government. As reported by Reuters, "Mr. Musk and Tesla respectfully seek a course correction," wrote Alex Spiro, a lawyer for Musk and Tesla. "Enough is enough." The SEC declined to comment. In a one-sentence order, Nathan directed the regulator to respond by Feb. 24. Thursday's letter escalates Musk's battle with regulators as they scrutinize his social media posts and Tesla's treatment of workers, including accusations of discrimination. The SEC quickly denied the allegations of harassment and claimed that a plan for distributing the money was going to be submitted to the court next month and the delay is due to the complexity.

In Thursday's letter, Spiro accused the SEC of ignoring its commitment to distribute to shareholders the US$40 million in fines, while instead "devoting its formidable resources to endless, unfounded investigations" into Musk and Tesla.

"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," Spiro wrote.