Court dashes Elon Musk’s complaint about SEC conduct
The letter by Elon Musk and Tesla including complaints about the conduct of the Securities and Exchange Commission (SEC) was not met with a warm welcome by the Court. On February 24, 2022, Judge Alison J. Nathan of the New York District Court signed an order dashing whatever claims the defendants had made.
In a letter sent to the Court on February 17, 2022, Musk and Tesla accused the SEC of failing to comply with its promise to pay Tesla’s shareholders the $40 million it collected as part of the settlement in these cases and that it purports to be holding for them. Instead, according to the defendants, the SEC has been devoting its formidable resources to endless, unfounded investigations into Mr Musk and Tesla.
The Judge noted that she is in receipt of the Defendants Elon Musk and Tesla, Inc.’s letter dated February 17, 2022, as well as the Commission’s response dated February 18, 2022, and the Defendants’ further letter dated February 21, 2022.
The Defendants’ precise application to the Court is unclear, the Judge said. They request a conference to address “why the SEC has failed to distribute these funds to shareholders but has chosen to spend its energy and resources investigating Mr. Musk’s and Tesla’s compliance with the consent decree by issuing subpoenas unilaterally, without Court approval.” The Court denied this request for a conference.
To the extent that the Defendants seek to impose a deadline on the Commission’s implementation of a Plan of Distribution of the Fair Fund, the Defendants may file a motion and submit briefing in support of doing so. Otherwise, the Court cannot enforce a deadline that does not currently exist.
Further, to the extent that Tesla and Musk have a non-frivolous basis to quash a subpoena in light of the Court’s prior orders in this case, the Defendants may make a motion, supported by briefing, that requests specific relief from the Court.
The Defendants also seek “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.” The letter does not contain specific facts or legal authority to justify this request. Moreover, the Court doubts that the regulations invoked by the Defendants are judicially enforceable against the Commission. This request was also denied.