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SEC claims authority to summon Elon Musk for tweets | WGN Radio 720

Detroit (AP) — US securities regulators have legal authority to summon Tesla and CEO Elon Musk for his tweets, invalidating Musk’s move to revoke the 2018 court agreement to pre-approve tweets It states that.

The Securities and Exchange Commission also announced that Musk is investigating a November 6, 2021 tweet asking followers if Musk should sell 10% of Tesla’s stake. The Commission confirmed that it issued an executive subpoena while investigating whether Musk and Tesla were in compliance with the disclosure regulations in the 2018 agreement.

The Commission is also investigating whether Tesla’s compliance with disclosure controls is accurately stated in its publications to the agency.

Details of the investigation were revealed on Tuesday in a SEC response to a complaint from a Musk lawyer asking a federal judge in Manhattan to invalidate the summons and revoke the 2018 agreement. This also includes the requirement for company lawyers to pre-approve musk tweets.

Musk’s lawyer Alex Spiro also alleged that the SEC used the court’s agreement “to trample on Mr. Musk’s First Amendment rights and impose prior restrictions on his speech.”

The Commission argues that the subpoena is legal and that musk does not follow the proper legal process to challenge the subpoena. SEC lawyer Melissa Armstrong called Musk’s challenge “flirty,” noting that Musk and Tesla agreed to pre-approve his tweets to officials from other companies.

“The court has long recognized that Congress has given the SEC a wide range of powers to conduct investigations into possible violations of federal securities law and to request the creation of evidence associated with such investigations.” “Armstrong wrote.

The subpoena issued under the seal is based on a formal order by the Commission to approve the investigation. They are seeking all written contact regarding the November 6th tweet and whether it has been presented to a Tesla lawyer for pre-approval.

Armstrong wrote that Tesla did not challenge the subpoena and was writing the document. However, Musk’s lawyer told the SEC that he would not prepare a document on pre-approval of his tweets, her reply said.

Immediately after a November tweet about the sale of shares, Musk began selling shares, writing on Twitter that the sale would pay tax obligations on stock options. Analysts estimate his tax obligations to be between $ 10 billion and $ 15 billion.

To date, he has sold more than 15 million shares worth about $ 16.4 billion. Sales were in late December, with musk selling nearly 10%.

In a motion filed in the US District Court in Manhattan in February, Spiro argues that Mask’s subpoena has no legal basis. He also states that the SEC cannot take action on Mask’s tweets without court permission.

The entire controversy agreed in October 2018 that Musk and Tesla each agreed to pay a $ 20 million fine for Musk’s tweet that he had money to keep Tesla private for $ 420 per share. It all started with an agreement.

Funds aren’t secured and electric car companies remain in public, but Tesla’s stock has skyrocketed. The settlement specified changes in governance, including the expulsion of Musk as chairman of the board and the pre-approval of his tweets.

Spiro’s motion calls on Nathan to break the deal, claiming that the SEC is using it and is using “almost infinite resources” to cool Musk’s speech. It is stated that Tesla is a less mature company and Musk signed an agreement when SEC actions jeopardized the company’s financing.

A message was left on Tuesday asking for comments from Spiro.

The SEC has asked Judge Allison Nathan to reject Mask’s motion to revoke some of the agency’s subpoenas and revoke the 2018 agreement. Spiro called for verbal discussion in this case.

SEC claims authority to summon Elon Musk for tweets | WGN Radio 720

Source link SEC claims authority to summon Elon Musk for tweets | WGN Radio 720

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