Elon Musk Seeks to Terminate Tweet-Fueled Fraud Settlement With SEC "The SEC's pursuit of Mr. Musk has crossed the line into harassment, which is quintessential bad faith," his lawyers wrote.

By Amanda Breen

On Tuesday, Tesla CEO Elon Musk asked a federal judge to terminate his 2018 settlement with the Securities and Exchange Commission (SEC), Reuters reports.

In August of 2018, the SEC sued Musk after he tweeted that he had "funding secured" to potentially take Tesla private at $420 per share. The settlement that followed included a $20 million fine for Tesla and a $20 million personal fine for Musk — both of which were to be distributed to shareholders for a total $40 million payout. Additionally, Musk was hit with a so-called "consent order," which requires a Tesla lawyer to review his tweets before they're posted to Twitter.

Related: How a Series of Elon Musk Tweets Helped Lead Investors to Dogecoin, a Meme-Inspired Cryptocurrency Worth 4 Cents

But Musk says the SEC never delivered on its promise, so he's ready to stop upholding his end of the bargain. Musk's lawyers have also asked U.S. District Judge Alison Nathan to block the SEC's subpoena requesting records of pre-approval of his November Twitter poll regarding the potential sale of Tesla shares, writing that "The SEC's pursuit of Mr. Musk has crossed the line into harassment, which is quintessential bad faith."

In the November Twitter poll, Musk announced that he would sell 10% of his Tesla stake if the majority approved — which it did. The price of Tesla stock dipped, and Musk has since sold $16.4 billion worth of shares. The electric-car company said on Tuesday that the Twitter activity in question "is behavior the SEC should encourage: a CEO's transparency with the public and shareholders about a proposed stock sale."

Related: Elon Musk Sells $5 Billion in Tesla Stock

Judge Nathan said in an order on Tuesday that the SEC must respond to Musk's request by March 22, and later that day, the SEC filed a distribution plan to pay Tesla shareholders.

Tesla Inc. was down 4.29% as of 11:18 a.m. EST.

Amanda Breen

Entrepreneur Staff

Features Writer

Amanda Breen is a features writer at Entrepreneur.com. She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.

Editor's Pick

Related Topics

Innovation

4 Ways to Bring Your Team Back From the Brink of Innovation Extinction

Innovation often seems constrained by not enough time and resources — but really, it's a lack of playfulness that prevents our best ideas from emerging.

Leadership

Want Employees Back in the Office? What Leaders Are (Still!) Getting Wrong About This Ask

For leaders facing the tricky task of getting employees back to the office, here are four communications strategies to soften the blow.

Business News

Megyn Kelly Is Returning to Primetime Television

The controversial correspondent will moderate the fourth and final Republican primary debate on Wednesday.

Business News

McCormick's Prediction for 2024's Flavor of the Year Just Dropped, But It May Be Unfamiliar to Some

The spice brand has released a yearly report for Flavor of the Year since 2000.

Leadership

If You Want People to Follow You, Stop Being a Boss — 8 Steps to Truly Effective Leadership

Understand the key differences and embark on the journey from boss to leader with these eight vital steps. This article unveils how to inspire and lead teams with passion and purpose.