Elon Musk is instructed by the SEC to settle a fine related to his Twitter acquisition or face potential legal consequences.
Musk shared on his social platform X that the regulatory body is pushing for him to agree to a fine of an unspecified amount to settle accusations relating to his 2022 acquisitions of shares in what was then referred to as Twitter.
Musk's legal representative, Alex Spiro, published a letter to Gensler stating that the regulatory body had required Musk to agree to the fine within 48 hours, or face charges on various counts. Laughingly, Musk wrote, "Oh Gary, how could you do this to me?"
Gensler and the SEC did not immediately respond to a request for comment.
The letter claimed that SEC staff had mentioned that this demand was due to instructions from their superiors and that charges would be brought forth swiftly unless Musk complied. The letter states that Musk has chosen not to comply with the demand.
Musk and the SEC have had ongoing disputes since Trump's first term, with the conflicts intensifying in recent years as Musk has challenged the agency's authority to restrict his communications with investors, and Gensler has become a prominent critic of crypto currencies, in which Musk is a significant investor and advocate.
According to the letter Musk posted, Spiro was also subpoenaed to testify, which he refused to do. Additionally, the agency reopened an investigation into another of Musk's companies, Neuralink.
"This sequence of events demonstrates that the commission is not interested in seeking the truth but instead is involved in an improperly motivated campaign against Mr. Musk and the individuals and companies linked to him," Spiro wrote in the letter. "We demand to know who issued these instructions – whether it was you or the White House. This tactic and misguided strategies will not intimidate us."
In 2018, the SEC reached a settlement with Musk and Tesla following allegations that Musk had misled investors through his tweet suggesting he had "established funding" to take Tesla private. According to the settlement, Tesla and Musk each paid fines of $20 million, and Musk agreed to have his tweets about significant company events reviewed by others at Tesla. He also relinquished his position as Tesla's chairman, but retained the CEO title. Musk later stated that he agreed to the settlement since failing to do so would have cut off essential funding sources required for Tesla's survival.
In April 2022, Musk revealed his acquisition of 9% of the shares in Twitter ahead of his later acquisition of the entire company at a $44 billion cost. The SEC then requested an explanation for why Musk had not disclosed his share acquisitions within the 10-day timeframe required by securities law. After completing his purchase of all Twitter shares, Musk subsequently renamed it X.
Musk and Gensler have also had disagreements over the regulation of crypto currencies, with Musk being a strong advocate for them and Gensler considering them as securities that should be under the SEC's authority. Gensler has referred to crypto currencies as "rife with fraud, scams, and abuses in certain applications."
However, Musk, a key supporter of President-elect Trump, won't be dealing with a Gensler-led SEC for much longer. Trump has nominated Paul Adkins, who has been co-chairman of the crypto advocacy group Digital Chamber's Token Alliance since 2017, to lead the agency.
The regulatory body is pushing for a fine in relation to Musk's 2022 business transactions with Twitter. According to Musk's legal representative, the SEC has demanded Musk to agree to the fine within 48 hours, or face charges.
