Elon Musk Settlement Slammed By SEC Commissioner

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Musk’s settlement with financial regulator over his use of Twitter criticised by SEC commissioner

Telsa CEO Elon Musk should admit to his conduct on Twitter, according to a commissioner for the US financial watchdog, the Securities and Exchange Commission (SEC).

The comments by SEC commissioner Robert Jackson made clear he did not support the agreement reached last week between Musk and the SEC.

Musk’s SEC settlement does not mean he is clear of legal issues however. Indeed, Musk’s controversial tweet about one of the rescuers of the Thai boy football team that were trapped in a flooded cave in 2018, continues to haunt him.

Conduct unbecoming?

This was because a US judge this week refused to dismiss the defamation complaint filed by British cave diver Vernon Unsworth, meaning Musk will now face a lawsuit over his ‘pedo guy’ tweet.

And Musk’s conduct on Twitter continues to be a source of concern, and has resulted in a SEC commissioner making a rare public statement on the matter after the settlement deal was approved by US federal judge.

“Given Mr. Musk’s conduct, I cannot support a settlement in which he does not admit what is crystal clear to anyone who has followed this bizarre series of events,” Jackson was quoted by Reuters as saying in a statement.

“Musk breached the agreement he made last year with the Commission – and with American investors,” Jackson added, highlighting that Musk had broken an existing agreement not to use Twitter for such statements.

The highly unusual case where a SEC commissioner breaks ranks and speaks out publicly against a decision made by the federal agency comes after US District Judge Alison Nathan in Manhattan approved the deal that settled SEC allegations, which sought to find Musk in contempt of a securities fraud settlement last year.

Musk has now agreed to submit public statements about the company’s finances to vetting by its legal counsel before publishing them.

Bad blood

The fact the bad blood continues between Musk and the SEC should surprise no one.

Last December Musk publicly admitted that he had “no respect” for the SEC, in his second attack on the US financial regulator after it forced him to step down as chairman of Tesla and pay $20m in penalties.

This action was taken because in August 2018, out of the blue, Musk tweeted that he was considering taking Tesla private and that he had secured funding to do so.

Musk was almost immediately hit with two lawsuits which alleged that Musk’s Tweets were fraudulent effort to attack short sellers.

These tweets brought Musk to the attention of the SEC and it sued Tesla and sought to ban Musk from acting as an officer or director of a publicly traded company.

The SEC accused Musk of securities fraud, and alleged he made a series of “false and misleading” tweets about potentially taking Tesla private.

In the end Musk stepped down as chairman but was allowed to retain his role as CEO, but he also had to pay millions of dollars in fines.

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Author: Tom Jowitt
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