Tesla Receives Subpoena from SEC Over 2018 Settlement

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Key Takeaways:

  • Earlier today, Tesla has reported receiving a subpoena from SEC. 
  • Musk’s tweet threads have started a feud between Tesla and Biden administration.
  • Biden is supporting the legacy automakers. 

In November, Tesla Inc. received a subpoena from the U.S. securities regulator (SEC) regarding the SEC settlement, stating that Elon Musk’s Twitter posts on material data should be supervised. 

On November 7, 2021, Musk took to Twitter to ask his followers to sell 10% of his Tesla stock. It resulted in a stock sell-off, and Musk’s shares fell by almost a quarter after that. This incident was disclosed to the SEC during an annual filing

This is not the first time that Tesla has received a lawsuit for Musk’s activity on social media violating his 2018 settlement with the SEC. Earlier also, his actions had caused Tesla “substantial financial harm”, especially when, in May 2021, he shared that Tesla’s stock price was “too high”. 

The 2018 settlement was over Musk’s tweets mentioned him taking Tesla private. Since then, SEC has asked the company to have all of Musk’s tweets regarding material information pre-approved by the company’s lawyers. According to the settlement, Musk also had to step down as the board chairman. 

The latest incident with the SEC has increased Tesla’s pressure from federal auto safety regulators to watch the vehicle recalls and investigations regarding its driver assisting software. 

For the last few months, Tesla and the White House have faced differences as Biden focuses on legacy automakers from the electric vehicle category, such as Ford Motor Co and General Motors. Musk was not even invited to the tech and auto companies meeting by U.S. President Joe Biden in January. 

Biden’s administration ignoring Tesla has infuriated Musk, and he has been taking advantage of Twitter to share his grievances against the government. He said that Biden encourages Detroit automakers as leaders and even referred to the president as a “damp sock puppet”. In addition, Musk has also offended the United Auto Workers (UAW) union, which are a vital ally of Biden. He said that employees of Tesla who will support joining UAW would lose their stock options in the company. In March, this tweet was also ordered to be deleted by The National Labor Relations Board. 

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Shreya Bhattacharya
Shreya Bhattacharya

A journalist & writer exploring new topics every day!

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