After Tesla on Thursday said that the U.S. Securities and Exchange Commission (SEC) is harassing CEO Elon Musk and the company as a whole with “unfounded investigations”, the government regulator responded to the claims in a letter submitted to a federal judge on Friday — reports CNBC.
The Tesla CEO and the SEC have a history of bad blood. Back in 2018, the SEC charged Musk with making “false and misleading” statements to investors through his tweets.
Tesla and Musk eventually reached a settlement with the SEC in 2019, wherein the CEO agreed to stringent oversight and regulation over his online activity. As part of the agreement, both Musk and Tesla as a company had to pay fines of $20 million USD each to the SEC, due to be distributed to Tesla shareholders by the U.S. regulator.
In a letter sent on Thursday to the court on behalf of Tesla and Musk, attorney Alex Spiro alleged that the SEC had “broken promises” and made Musk the subject of an “unrelenting investigation,” all while dragging its feet on disbursing that $40 million to the company’s investors.
Stephen Buchholz, Assistant Regional Director of Enforcement at the SEC, said in a Friday letter that the agency was actually making progress on distributing the fined amount to Tesla stockholders, a task that was fairly complex.
Buchholz noted that Tesla had never expressed any concern about its progress to the agency before, adding that the SEC staff expect to submit a “proposed plan of distribution” to the court for approval by the end of March 2022.
Spiro’s letter was prompted by a subpoena Tesla had received from the SEC late last year, which the electric automaker disclosed in a recent financial filing for Q4 2021.
“On November 16, 2021, the SEC issued a subpoena to us seeking information on our governance processes around compliance with the SEC settlement, as amended,” read the filing.
The SEC’s Friday letter to the court argued that Tesla was not following proper procedures to challenge any subpoena the agency had issued as an independent regulator, aside from the court proceedings.
Tesla is also currently staring down the barrel of a separate SEC investigation over fire risk potential with the company’s solar panels, discovered in a letter from a whistleblower and former Tesla employee.
