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Why is Elon Musk in trouble with the Securities and Exchange Commission?

On Behalf of | Mar 29, 2022 | Firm News

Elon Musk is the richest man in the world and the CEO of Tesla. He also is very influential when it comes to the stock market and cryptocurrency market. One word from him can cause major swings.

According to CNBC, Musk got into trouble with the SEC in September 2018 when he made posts on Twitter saying he had a private buyer to take over Tesla. His words caused a huge jump in Tesla stock. The SEC charged him with making false promises and making misleading statements. He entered an agreement with the agency, which continues to cause him issues.

The battle

Musk accused the SEC of harassment. He said they were not following the agreement they had made in 2018. So, the two entered into a revised settlement. As part of the agreement, Musk had to step down as Tesla board chairman. He also had to have a securities legal expert review all his posts on social media before they went live if they contained any type of business information.

New issues

The deal also included a $40 million fine paid by Musk that would go to Tesla. He’s now saying the SEC never paid that money back to the company. The SEC claims there is a payment plan with the court that should have approval by March 2022.

Musk’s legal team says the SEC is too busy worrying about him than about following through on the money distribution. They say the agency continues to harass him by conducting needless investigations and issuing subpoenas. They alleged the actions are because Musk speaks critically of the U.S. government.

With how influential he is and his ginormous net worth, it is likely the SEC and Musk will remain intertwined for a long time to come despite Musk’s obvious desires to part with them.