Elon Musk fight with SEC reaches tipping point
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Elon Musk is seen in the U.S. Capitol on Dec. 5. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images
Elon Musk's ongoing feud with the Securities and Exchange Commission escalated Thursday when he publicly challenged the agency, claiming it gave him 48 hours to pay a penalty or face charges related to his Twitter acquisition.
The big picture: Musk's brawl with the regulator — a six-year on-again-off-again battle involving numerous unrelated issues — has reached an inflection point.
Catch up quick: The SEC has been investigating Musk over whether he properly disclosed his ownership stake in Twitter before he bought the whole thing in 2022.
- In 2018, the SEC hit Musk with securities fraud charges over his social-media claim that Tesla had lined up a buyout bid at a price of $420 per share.
- In the letter Musk posted Thursday, his attorney accused the SEC of "six years of harassment of Mr. Musk" and said he had "categorically refused" to cooperate with the agency's recent demands.
"This series of events makes clear that the Commission is not motivated to seek the truth but instead is engaged in an improperly motivated campaign against Mr. Musk and the individuals and companies associated with him," his attorney, Alex Spiro, wrote.
The big picture: "Musk's biggest beef with the government is the SEC," University of Michigan business professor Erik Gordon said in a recent interview. "He thinks they've harassed [him], he thinks they're way off base, he's called them names."
Zoom in: Though Musk's earliest issues with the SEC date back to a former chairman serving during Trump's first term, Musk Thursday suggested the attention was personal.
- "Oh Gary, how could you do this to me?" he wrote on X, referring to current chair Gary Gensler, arguing in another post that "the SEC is just another weaponized institution doing political dirty work."
- Spiro's letter, addressed to Gensler, demanded to know who directed the recent actions, the chair himself or "The White House."
- Spiro did not respond to Axios' request to authenticate the letter and comment further.
State of play: If the SEC's latest demands are true — as stated in Spiro's letter — the boss of Tesla, SpaceX, Neuralink, xAI and X could be facing new charges before Gensler leaves office at the end of President Joe Biden's term.
- An SEC spokesperson said in a statement that "it is the policy of the SEC to conduct investigations on a confidential basis to preserve the integrity of its investigative process. The SEC therefore does not comment on the existence or nonexistence of a possible investigation."
- Both the SEC and The White House will look quite different in a month, however.
Between the lines: When Musk's ally Trump succeeds Biden as president, his new nominee for SEC chair will be in a position to influence the agency's actions in relation to Musk and his companies. That includes Neuralink, which, according to the Spiro letter, is now facing a "reopened" SEC probe.
What we're watching: Whether Musk's SEC troubles do fade away after Trump takes office.
- On one hand, Musk piled money into the effort to reelect Trump and has become a close adviser of the incoming president. What's unclear is whether he's advised Trump on the SEC.
Zoom in: Trump recently said he would nominate crypto ally and former SEC commissioner Paul Atkins as chairman, and it's far from clear whether the veteran regulator and lawyer would back away from any of the SEC's cases involving Musk.
- Atkins representatives did not respond to a request for comment on Friday.
