The settlement against Elon Musk was reached to resolve securities fraud charges for a tweet in which he claimed he had 'funding secured' to take Tesla private at $420 per share.
Instead of releasing the funds to shareholders, the electric vehicle maker claims that the agency has "gone rogue" and is "weaponizing the consent decree by using it to try to muzzle and harass Mr. Musk and Tesla, while ignoring its court-ordered duty to remit $40 million that it continues to hold while Tesla’s shareholders continue to wait."
"The SEC seems to be targeting Mr. Musk and Tesla for unrelenting investigation largely because Mr. Musk remains an outspoken critic of the government," Musk's lawyer, Alex Spiro, wrote in a letter to the U.S. District Court for the Southern District of New York. "The SEC’s outsized efforts seem calculated to chill his exercise of First Amendment rights rather than to enforce generally applicable laws in evenhanded fashion.
Tesla and Elon Musk have accused the SEC of failing to distribute $40 million to the company's shareholders as part of a 2018 settlement to resolve securities fraud charges. According to the letter, the regulator has been in possession of funds owed to Tesla investors for more than 1,200 days and has not yet announced a distribution plan. In May, the court appointed Rust Consulting to dole out the cash to investors. However, the court said in a Dec. 21 filing that the firm had not sent any status reports and ordered it to file one by Jan. 7.
The letter asks to schedule a hearing in order to look into the matter in the hopes of bringing the agency's "harassment campaign to an end, while ensuring that the SEC finally delivers, at long last, on its commitment to Tesla’s shareholders."
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