Wednesday, May 18

US judge approves SEC payout from Elon Musk, Tesla settlements


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NEW YORK — pxpA federal judge on Friday authorized the US Securities and Exchange Commission to distribute $40 million from its 2018 settlements with Tesla Inc and Chief Executive Officer Elon Musk, after Musk accused the regulator of dragging its heels.

US District Judge Alison Nathan in Manhattan approved the distribution plan that the SEC proposed on March 9.

Her approval came after Musk said the SEC had ignored its “court-ordered duty” by waiting nearly 3-1/2 years to make the payout to investors in his electric car company.

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Musk and Tesla had each paid $20 million civil fines, and Musk stepped down as Tesla’s chairman, to resolve SEC claims that Musk defrauded investors by tweeting on Aug. 7, 2018 that he had “funding secured” to take Tesla private.

The available funds have since grown to about $41.2 million including interest, according to the SEC.

Alex Spiro, a lawyer for Musk, declined to comment.

Musk is seeking to throw out his 2018 agreement with the SEC, which requires that a Tesla lawyer pre-approve his tweets if they could be material to investors.

The SEC opposes Musk’s request. It is also investigating Musk’s Nov. 6, 2021 tweet asking his followers whether he should sell 10% of his Tesla stake, to cover tax bills on stock options.

Musk has since sold more than 15 million Tesla shares worth about $16.4 billion.

The cases are SEC v Musk, US District Court, Southern District of New York, No. 18-08865; and SEC v Tesla Inc in the same court, No. 18-08947. (Reporting by Jonathan Stempel in New York; Editing by Bernard Orr)



financialpost.com