The development, which signals the investigation may be nearing a conclusion, is the latest salvo in a year-long public feud between the top U.S. markets regulator and the world’s richest man, as per a Reuters report.
Musk on Thursday posted on X a copy of a letter sent by his lawyer to SEC Chair Gary Gensler saying the agency had given Musk 48 hours to agree to pay a penalty to settle the probe or face civil charges, and demanding to know whether Gensler was personally behind the development.
Elon Musk’s Twitter Venture
The SEC has been investigating whether Musk broke securities laws in 2022 when he bought stock in Twitter, which Musk subsequently renamed X, as well as statements and filings he made in relation to the deal, previous disclosures show. According to the source, the agency has been probing Musk’s SEC filing disclosing his Twitter share purchases, which was at least 10 days late, and whether he intended to benefit from that delay, which some academics have estimated saved Musk over $140 million. As part of the probe, the agency had asked a federal court to compel Musk to testify after the billionaire failed to show up to agreed depositions.
On Tuesday, the SEC sent Musk a settlement offer seeking a response in 48 hours, but extended the deadline to Monday after a request for more time, the source said, speaking on the condition of anonymity to discuss confidential enforcement matters.A spokesperson with the SEC’s public affairs office declined to comment. Musk’s lawyer did not respond immediately to calls for comment.48-Hour Deadline
The SEC commonly tries to resolve probes through settlements rather than suing a defendant, but the initial 48-hour deadline was unusually tight, legal experts told Reuters. If Musk fails to respond, the SEC will likely proceed through a “Wells” notification process, a formal step in which the SEC outlines potential charges and allows Musk to respond, the source said.
The Thursday letter Musk shared on X, which was signed by his attorney Alex Spiro, said the SEC has also reopened an investigation into Musk’s brain-chip startup Neuralink.
Neuralink did not respond to requests for comment. The nature of that inquiry is not clear, but U.S. lawmakers and animal-rights advocates have pressed the SEC to scrutinize comments Musk has made about the safety of Neuralink’s implants.
SEC After Elon Musk Since 2018
The SEC first sued Musk in 2018 during President-elect Donald Trump’s first term, accusing him of breaking the law when he posted on social media that he had “funding secured” to take his electric carmaker Tesla private when the SEC found he had not.
Despite ultimately settling and agreeing to an unusual arrangement requiring some of his posts to be vetted by an attorney, Musk subsequently disputed the SEC’s findings in that case and has over the years accused the agency of harassment – claims Spiro reiterated in his Thursday letter.
A major backer of Trump, Musk in the new administration will co-lead the new Department of Government Efficiency tasked with cutting government costs, potentially giving him some power over the SEC’s workings. In his letter, Spiro intimated the SEC’s bid to advance the probe may have been politically motivated.
“We demand to know who directed these actions – whether it was you or the White House,” Spiro wrote in the letter.
But the source argued that failing to pursue what the SEC believes is a securities violation by Musk would in fact be the political move.
FAQs
- What is new name of Twitter?
New name of Twitter is ‘X’. - Who is owner of ‘X’?
Elon Musk is owner of ‘X’.
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