Tesla boss Elon Musk has accused US regulators of targeting him for “unrelenting investigation” because of his criticism of the government.
In a court filing, the billionaire says the Securities and Exchange Commission has engaged in “outsized efforts” to monitor the firm that “seem calculated to chill his exercise” of free speech.
The letter heightens the battle between Mr Musk and financial regulators over his social media activity.
His Twitter posts often move markets.
In 2018, the SEC ordered Mr Musk to submit to increased oversight of his posts about Tesla as part of a settlement into claims that he misled investors in 2018 with a post about taking the electric car company private.
The SEC has repeatedly raised questions since about Mr Musk running afoul of the agreement, in which Mr Musk agreed to give Tesla officials pre-approval of posts about the company.
In November, regulators subpoenaed the firm, requesting information about its governance processes related to the order. That month, Mr Musk asked his more than 70 million Twitter followers whether he should sell 10% of his Tesla shares, driving shares lower.
In the letter to Judge Alison Nathan, who is overseeing the 2018 settlement, the billionaire’s attorney Alex Spiro accused regulators of “weaponizing the consent decree by using it to try to muzzle and harass Mr. Musk and Tesla”.
“The SEC seems to be targeting Mr. Musk and Tesla for unrelenting investigation largely because Mr. Musk remains an outspoken critic of the government,” he wrote on behalf of Mr Musk and Tesla.
“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”.
He said the SEC had opened “serial investigations” without seeking guidance from the court and that the agency was overdue to distribute to investors the $40m in penalties it collected as part of the 2018 settlement.
The SEC did not respond to a request for comment. Mr Musk’s Twitter musings on topics from Tesla to crypto currency have frequently appeared to move market prices. He has used his perch to criticise the SEC, saying oversight at the agency was “broken”.
Mr Musk has also criticised US President Joe Biden for not acknowledging the contributions of SpaceX or Tesla, most recently dismissing the president as a “damp [sock emoji] puppet”.
But Professor James D Cox, who teaches corporate and securities law at Duke University, said the SEC is responding to Mr Musk’s decision to repeatedly flout a court order, not his other antics.
Executives at publicly traded companies are bound by protocols governing disclosure of information, he said.
“This isn’t a question of the SEC targeting him,” he said. “They’re doing it because he is brazenly ignoring the order of the SEC that has the imprimatur of the federal court system.”
Source: bbc.com
