Tesla (NASDAQ: TSLA) CEO Elon Musk is accusing the U.S. Securities Exchange Commission (SEC) of "harassment" through an "unrelenting investigation," according to a regulatory filing.
Specifically, Musk is trying to allege that the SEC is engaging in what essentially amounts to a calculated effort to stifle his and Tesla's free speech. If the company's counsel is to be believed, the ongoing probe persists because Musk is an "outspoken critic of the government." A federal judge ordered the SEC to respond to the allegations.
The regulator, meanwhile, has stated in a letter that its actions were standard regulatory procedure and that it is compliant with the expectations placed on it by the court.
"The commission's enforcement staff have...sought to meet and confer with counsel for Tesla and Mr. Musk to address any concerns regarding Tesla and Musk's compliance," SEC official Steven Buchholz wrote in a response filed to the court.
The SEC's interest in Musk comes from the latter's penchant to tweet information regarding Tesla that might either be considered misleading or privileged to shareholders. Musks' problems began, for example, with a 2018 tweet that he was set to take Tesla private and had "secured funding" to do so. After an SEC probe unveiled no such deal ever having existed, the tweet was considered fraudulent, and the company was forced to settle charges with the regulator.
Part of the settlement was the condition of "pre-clearance" of the CEO's notorious tweets with its legal team to filter out privileged information and potentially misleading claims. Elon, however, has routinely tested the regulator's patience with tweets that arguably violate this agreement. Despite continual questioning by the SEC, Tesla denied that the deal didn't consider the tweets in question.
The SEC seems to have run out of patience in November when it subpoenaed Tesla over its lack of oversight of Musk's tweets.
Given Tesla's other ongoing legal problems, such as the National Highway Traffic Safety Administration's probes into its vehicles or the recent filing of a racial discrimination lawsuit by the State of California, the current battle with the SEC hardly seems like a worthy use of the company's time.