Get All Access for $5/mo

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 Edited by Jessica Thomas

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

Senior Features Writer

Amanda Breen is a senior 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.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Productivity

6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.

Business News

These Companies Offer the Best Work-Life Balance, According to Employees

The ranking is based on Glassdoor ratings and reviews.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Leadership

Why Your AI Strategy Will Fail Without the Right Talent in Place

Using fractional AI experts through specialized platforms allows companies to access top talent cost-effectively, drive innovation and scale agile strategies for growth.

Business News

Here's What the CPI Report Means for Your Wallet, According to JPMorgan and EY Experts

Most experts agree that there will be another rate cut next week.