The SEC is set to distribute funds from a 2018 settlement with Elon Musk and Tesla that resolved a charge of fraud as well as required Musk to obtain advance approval for select tweets. The SEC has asked a judge for permission to obtain and distribute the $40 million to investors obtained in that civil settlement. This is according to Reuters, which also noted that the timing of this distribution probably isn’t a coincidence.
What you Need to Know
- These funds are from a 2018 court settlement.
- The distribution of funds comes after criticism from Musk and his lawyers.
- The SEC outlined a “fair and reasonable” stradegy to distribute the now $41.2 million dollars (with interest) to investors
- The 2018 Settlement came after Musk tweeted “funding secured” to take the company private in 2018, which the SEC said defrauded investors.
- This caused Musk to step down as CEO.
- Musk formally requested to end a decree which requires him to get permission to Tweet about Tesla from Tesla’s lawyers last night.
SEC To Distribute Funds From the Elon Musk, Tesla Settlement Following Criticism from Musk and His Lawyers
According to Reuters, Musk and his Lawyers have recently noted last month that they felt that the U.S. Securities and Exchange Commission was purposefully dragging its feet, and therefore breaking promises. Musk’s lawyers feel that the SEC is continuing to “muzzle” his free speech and “harass” the multi-billionaire with investigations into his conduct.
The SEC didn’t mention that part of the dispute during a court filing on Tuesday night. But it did describe what it feels is a “fair and reasonable” way to distribute the payout to investors, which now rests at $41.2 million when you factor in interest.
Musks Lawyers haven’t commented on this payout or filing.
More on That 2018 Settlement
In August 2018, Musk tweeted that he had “funding secured” to take the Tesla private. The SEC claimed Musk defrauded investors. Following this, a consent degree required Musk to ger pre-clearance from Tesla’s lawyers about any tweets or other public statements that could be important to the electric car company.
But Musk believes the SEC is “weaponizing” the decree to stifle him from criticizing the government. He also noted that he felt pressured to accept it to save tesla.
“I never lied to shareholders,” Musk said in the filing “I entered into the consent decree for the survival of Tesla, for the sake of its shareholders.”
It’s unclear how this will play out. It’s up to U.S. District Judge Alison Nathan. She enforces the decree and will also need to approve this distribution plan.