A U.S. federal district judge rejected Elon Musk’s attempt to bring the Securities and Exchange Commission before the court in an order out Thursday.
The Tesla CEO, via his attorney Alex Spiro, had alleged in letters to the court this month that the SEC had: leaked information about a federal investigation to an unidentified party, harassed Musk and Tesla with continuous investigation, and neglected their duties to remit $40 million to shareholders that Tesla and Musk had previously paid in fines to settle securities fraud charges.
The SEC charged Musk with civil securities fraud in 2018 after he tweeted that he was considering taking his electric vehicle company private at $420 per share and had “funding secured.” They reached a revised settlement agreement by 2019 to resolve the matter, but Musk has expressed his disdain for them publicly before and since.
In letters from his attorney this month to the court, the CEO characterized the SEC as making a “calculated effort” to “chill” his right to free speech, and alleged them of sending subpoenas, including one in November 2021, in order to retaliate against him for public criticism of the government.
On Twitter, where Musk has amassed tens of millions of followers, this week the CEO said he has been “building a case” against the SEC but he did not provide specific details. “I am greatly encouraged by the Justice Department investigating short sellers,” Musk told CNBC in an email Tuesday. “This is something the SEC should have done, but, curiously, did not.”
In her order on Thursday, Judge Alison Nathan noted that there was never a deadline established for the SEC to disburse the $40 million to shareholders, but she said Musk could file a motion to set one. She wrote, “Otherwise, the Court cannot enforce a deadline that does not currently exist.”
She also said that Musk — if he wanted to challenge a subpoena by the SEC — would need to “have a non-frivolous basis” to do so and could file a motion to quash a subpoena, with a briefing to request “specific relief from the Court.”
On Musk’s allegation that the SEC had leaked information about a federal investigation to an un-named entity, the judge noted that his attorney’s letter to the court did not “contain specific facts or legal authority to justify” a request for “on-the-record assurance that the Commission has not leaked investigative details.”
Read the full court order here: