Investor's Corner

SEC asks to disburse $40M to investors four years after Musk settlement

The Securities and Exchange Commission, or SEC, asked a judge for permission to disburse $40 million in funds to investors that were collected as part of a 2018 settlement with Tesla and its CEO Elon Musk.

The SEC said in a filing on Tuesday night that it was ready for a “fair and reasonable” means to distribute the funds to investors who were potentially harmed by Musk’s “funding secured” Tweet in 2018, according to Reuters. The penalties were a $20 million fine from Musk, a $20 million fine from Tesla, and other various regulations, including monitoring Musk’s Tweets.

Earlier this week, Musk asked a judge to formally end the terms of the settlement as he felt pressured to accept them when they were announced in September 2018. Claiming the SEC is “weaponizing” the terms of the agreement due to his criticism of various government agencies, especially the SEC, the request has not yet been approved or denied.

“I never lied to shareholders,” Musk said, according to a filing. “I entered into the consent decree for the survival of Tesla, for the sake of its shareholders.”

Musk’s request follows a letter from his lawyers in February, which accused the SEC of leaking information from a federal investigation. Alex Spiro, Musk’s lawyer, also accused the SEC of withholding the payments, “ignoring its court-ordered duty to remit $40 million that it continues to hold while Tesla’s shareholders continue to wait.”

Tesla says SEC is withholding a $40M shareholder payout from 2018 ‘Funding Secured’ settlement

Now, the SEC is willing to disburse the funds to investors who lost money investing in Tesla shares in the “1-1/2 days after Musk’s Tweet.”

According to the report, the $40 million payout has actually swelled to $41.2 million with interest. The SEC filed the plan to disburse the funds just ten hours after Musk submitted his request for the court to effectively cancel the decree.

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SEC asks to disburse $40M to investors four years after Musk settlement
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