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Tesla CEO Elon Musk is accusing SEC of leaking information from the federal probe

Tesla CEO Elon Musk accuses SEC of leaking federal probe information

February 23, 2022: Through his attorney, Tesla CEO Elon Musk accused the Securities and Exchange Commission (SEC) of leaking information about a federal investigation to retaliate against him for public criticism of the federal financial regulators.

On Monday, in a letter to U.S. District Judge Alison Nathan, Musk attorney Alex Spiro wrote: “It has become clearer and clearer that the Commission is out to retaliate against my clients for exercising their First Amendment rights most recently by criticizing the Commission on the public docket and by petitioning this Court for relief.”

The letter came four days after Musk alleged that the SEC was engaged in harassment by continually investigating him, that the agency tries to chill his right to free speech, and had neglected their duties to remit $40 million to shareholders that Tesla and Musk paid in fines to settle securities fraud charges.

Spiro did not specify which investigation or what type of information the SEC may have leaked and to whom. In the letter, alleging that at least one member of the SEC had leaked “certain information regarding its investigation” without providing supporting evidence.

The conflict amid Musk and the SEC started in September 2018 when the SEC charged Musk with making “false and misleading” statements to investors after he wrote on Twitter that August that he had secured enough funding for a huge private buyout of Tesla at $420 a share. The stock seesawed month, and the deal Musk alluded to never materialized.

Musk and Tesla paid $20 million in fines each, and Musk was forced to step down as chairman for nearly three years as part of a revised settlement agreement the agency reached with the automaker and CEO in 2019. Tesla had to put in place a system for monitoring Musk’s statements to the public about the company, whether on Twitter, in a blog post, or any different medium.

The SEC’s Steven Buchholz replied to the allegations on Friday, saying the agency was making progress on disbursing the $40 million to shareholders. He characterized the task as complex and noted that Tesla and Musk had never expressed any concern regarding remittance. He wrote that the SEC staff expects to submit a “proposed plan of distribution” to the court for approval by the end of March 2022.

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