Elon Musk is intensifying his feud with the Securities and Exchange Commission, accusing the agency of “leaking” information from a federal investigation in retaliation for his public criticisms.
The accusation is contained in a new letter from Musk’s attorney Alex Spiro to US District Judge Alison Nathan, who oversaw the settlement between Musk and the SEC over Musk’s 2018 “funding secured” tweet, which landed him in prison for securities fraud. It was the third letter in two weeks in a feud between Musk and the US government that shows no signs of losing steam.
As per reported by The Verge, in a recent letter, Musk accuses the SEC of leaking information regarding a federal probe into his securities fraud case. Spiro writes (emphasis ours):
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. Upon information and belief, after I filed the February 17, 2022 letter to this Court regarding the Commission’s conduct, at least one member of the SEC staff responded by leaking certain information regarding its investigation.
This leak is emblematic of the vindictive, improper conduct that occasioned my letter: the SEC is retaliating against Mr. Musk and Tesla, without answering to the constraints of principle or law in so doing.
Spiro goes on to request that SEC staff “preserve their records and devices” and notifies Nathan that Musk’s legal team has “reported the matter” to the agency’s inspector general. He also states that he is seeking an “on-the-record assurance that the Commission has not leaked investigative details in violation of its own rules and policies, and is otherwise acting in accordance with the law.”
To be sure, Spiro doesn’t provide any evidence to back up his claim of leaked information. A spokesperson for the SEC declined to comment on Musk’s most recent letter.
The infamous “funding secured” tweet has loomed over Tesla for the past three years. After Musk sent the tweet, the SEC launched an investigation, eventually concluding that Musk misled investors about his plan to take Tesla private.
A year later, Tesla and the SEC agreed that Musk’s tweets about Tesla should be subject to more oversight. As per the settlement, a company lawyer was designated to pre-approve Musk’s tweets about Tesla’s financial health, sales, or delivery numbers — estimated or otherwise — as well as other specific subjects.
According to CNBC, Tesla disclosed in a 2021 fourth-quarter earnings report that the SEC issued a subpoena to the company in November 2021. According to Tesla’s quarterly filing, the agency is seeking information on its “governance processes around compliance with the SEC settlement, as amended.” He also said the SEC issued a separate, but similar subpoena to Musk.
The November subpoena came shortly after Musk polled his tens of millions of Twitter followers in asking if he should sell 10% of his stake in Tesla. They voted yes. But a major portion of the sales that followed the Twitter poll were part of a plan that Musk adopted in September 2021.