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Elon Musk, Tesla attack SEC for 'relentless' harassment

Elon Musk, Tesla attack SEC for ‘relentless’ harassment

NEW YORK, Feb 17 (Reuters) – Tesla Inc (TSLA.O) Its chief executive, Elon Musk, on Thursday accused the US Securities and Exchange Commission (SEC) of harassing them with an “endless” and “relentless” investigation to punish Musk for his outspoken criticism of the government.

The accusation came in a letter to U.S. District Judge Alison Nathan in Manhattan, who presided over the 2018 SEC settlement stemming from Musk’s tweet about a potential purchase of Tesla.

“Mr. Musk and Tesla respectfully seek to correct course,” Alex Spiro, Musk and Tesla’s attorney, wrote. “Enough is enough.”

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The Securities and Exchange Commission declined to comment. By order of one sentence, Nathan directed the organizer to respond by February 24.

Thursday’s letter escalates Musk’s battle with regulators as they scrutinize his social media posts and Tesla’s treatment of workers, including accusations of discrimination.

This followed Tesla’s February 7 disclosure that it had received a subpoena from the Securities and Exchange Commission regarding its compliance with the 2018 settlement. Read more

The Securities and Exchange Commission (SEC) sued Musk in August 2018 after he tweeted that he had obtained “secured financing” in order to privately convert his electric car company at $420 per share. In fact, the takeover deal was not close.

Tesla and Musk settled by agreeing to pay $20 million in civil fines, and to allow Tesla’s lawyers to pre-screen some of Musk’s communications, including tweets that could affect Tesla’s stock price. Musk also relinquished the Tesla presidency.

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The latest subpoena was issued on November 16, 10 days after Musk polled his Twitter followers on whether he should sell 10% of his stake in Tesla, which led to the sell-off.

Chilling letter

In a letter Thursday, Spiro accused the Securities and Exchange Commission of ignoring its commitment to distribute $40 million in fines to shareholders, while instead “dedicating its vast resources to endless and baseless investigations” into Musk and Tesla.

“Worst of all, the SEC appears to be targeting Mr Musk and Tesla for a relentless investigation in large part because Mr. Musk remains an outspoken critic of the government; the SEC’s massive efforts appear to have been calculated to quell his exercise of amendment rights,” Spiro wrote. the first”. .

Spiro asked Nathan to schedule a conference to find out why the Securities and Exchange Commission was “unilaterally issuing subpoenas” without court approval, and why the money isn’t being distributed.

If the Securities and Exchange Commission finds that Musk violated the settlement, it can order Nathan to dispose of her and reopen the case, or pursue new charges.

The letter was filed eight days after the California Department of Employment and Housing sued Tesla over allegations by black workers that it tolerated racial discrimination at its Fremont, California factory. Read more

Tesla described that lawsuit as misleading. It is also trying to reduce or eliminate the jury award of about $137 million to a former black elevator operator for subjecting him to a hostile work environment at the Fremont plant.

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Separately Thursday, the National Highway Traffic Safety Administration (NHTSA) opened a formal investigation into 416,000 Tesla Model 3 and Model Y vehicles after receiving complaints about unexpected braking associated with the autopilot system. Read more

Tesla has issued 10 recalls since October, including some under pressure from the NHTSA.

Tesla shares closed $47.04, or 5.1%, as low Thursday as $876.35 on the Nasdaq.

The cases are SEC v Musk, US District Court, Southern District of New York, No. 18-08865; and SEC v. Tesla Inc in the same court, No. 18-08947.

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Additional reporting by Jodi Godoy and Jonathan Stemple in New York and David Shepardson in Washington. Editing by Toby Chopra, Mark Porter and Sandra Maller

Our criteria: Thomson Reuters Trust Principles.