Alex Spiro Criticizes SEC’s “Improperly Motivated Campaign” Targeting Elon Musk, Seeks Clarity on Agency’s Guidance

This article does not constitute investment advice. The author does not hold any positions in the stocks discussed.

Escalating Tensions: Elon Musk vs. the SEC

The ongoing clash between Elon Musk and the U.S. Securities and Exchange Commission (SEC) has reached a fever pitch. In a scathing letter addressed to SEC Chair Gary Gensler, Musk’s attorney, Alex Spiro, dismissed a proposed settlement for the charges against the CEO of Tesla. This correspondence alleges a covert agenda within the agency to undermine Musk’s interests, sparking heightened scrutiny of the SEC’s actions.

The Context Behind the Investigations

To understand the stakes, we must revisit the SEC’s investigation into Musk’s delayed disclosure regarding his stake in Twitter, now X Corp. Musk revealed his 9.2% ownership only on April 4, 2022—about ten days after surpassing the mandatory 5% disclosure threshold, as stipulated by the Hart-Scott-Rodino Act. This law requires timely reporting when acquiring significant shares in publicly traded companies.

Compliance Issues and Legal Maneuvering

In May 2024, Musk initially agreed to testify in relation to the SEC’s investigation but later failed to provide the requested deposition. This non-compliance has led the SEC to seek sanctions against him in federal court in San Francisco. Additionally, Musk has approached the U.S. Supreme Court, asking it to nullify an agreement requiring him to receive prior approval for his tweets from a designated “Twitter sitter.”

Oh Gary, how could you do this to me? 🥹 pic.twitter.com/OoooQI77ZS

— Elon Musk (@elonmusk) December 12, 2024

Key Demands and SEC Actions

The situation has taken a critical turn, with the SEC laying down an ultimatum for Musk:

The SEC has given Musk 48 hours to accept a settlement or else face “charges on numerous counts.”
This settlement push is allegedly being directed by higher-ups within the agency.
Alex Spiro has been recently subpoenaed by SEC staff, who threatened further legal action should he fail to comply.
In a parallel development, the SEC has opened an investigation into Neuralink.
The letter from Spiro concludes with a demand for clarity on who is orchestrating these actions against Musk.

What’s Next?

As this legal drama unfolds, all eyes are now on the SEC to respond to Musk’s bold assertions. The implications of these developments could have far-reaching effects on both Musk’s enterprises and the regulatory landscape. Stay tuned as we await the next chapter in this escalating saga.

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