Elon Musk accuses Biden of targeting him in SEC ‘harassment campaign’ over criticism of government

The CEO claims the SEC has gone ‘rogue’

Tesla CEO Elon Musk has accused the SEC of a “harassment campaign” aimed at chilling “his exercise of First Amendment rights”.

Mr Musk's lawyers claimed that his client was being targetted by the SEC because he is an outspoken critic of the government.

The CEO believes the SEC is investigating him to shut him up.

The complaints are part of Mr Musk's attempt to recoup $40m the SEC allegedly owes Tesla shareholders.

In 2018, Mr Musk tweeted that he was taking Tesla private at “$420” a share. While the tweet was meant to be a marijuana joke reportedly meant to impress his now ex-wife indie rocker Grimes, the government took him to task for misleading investors.

Ultimately, Mr Musk was forced to agree to a consent decree, and the SEC collected $40m in penalties from Tesla stockholders as part of the settlement.

Mr Musk's attorneys claim that the SEC is still enforcing the consent decree without the supervision of a US court – a stipulation that was included in the original settlement.

In the legal filing, Mr Musk's lawyers point out that “the SEC has not once come before Your Honor to seek discovery concerning compliance under the consent decree”.

The attorneys then accuse the SEC of having “gone rogue” and of having “unilaterally opened its own investigations”.

“The SEC has conducted these investigations wholly outside of this court’s supervision,” the filing claims.

According to the consent decree, Mr Musk must consult a lawyer before sending any tweets about Tesla.

In mid-November, Mr Musk launched a Twitter poll asking if he should sell 10 per cent of his stake in the company. The SEC then subpoenaed the company to determine if it had ben in violation of the consent decree. Mr Musk's legal team claims the SEC jumped right to subpoenas without first seeking discovery in order to determine whether any violations had occurred.

Mr Musk's lawyers claim the SEC's continued enforcement of the consent decree is being used as a muzzle for the CEO, who frequently criticises the government, often from a conservative position.

Despite being a bit of a bomb thrower, Mr Musk is generally sensitive to criticism. In 2018 – the same year he made the 420 tweet – Mr Musk tried to live up to the idea that he is the real world Tony Stark by utilising Tesla engineers and a tiny submarine to rescue a Thai boys football team that had become trapped inside a cave. When his plan was laughed at and labelled as a “PR” stunt by Vernon Unsworth, a diver who helped to rescue the boys, Mr Musk became defense and – after a back and forth – called Mr Unsworth a "pedo guy."

That comment resulted in a defamation lawsuit.

Mr Musk has also been sparring with Tesla short-sellers for years, going so far as to make pairs of red Tesla shorts to mock his detractors after the company surpassed Toyota as the world's most valuable automaker.

In November, Tesla began selling a “Cybertruck-shaped” stainless steel whistle, saying buyers could use it to “blow the whistle on Tesla”.

The obvious whistleblower joke is likely a reference to workers and former workers who have talked to the press and the government about alleged workplace safety issues at Tesla factories.

Unfortunately for Mr Musk, he cannot just meme away the SEC.

The consent decree Mr Musk and Tesla are focused on in the court filing has no expiration date, but could be thrown out by a judge if both parties are found to have violated its terms. Both parties have accused each other of violating the terms of the decree. The SEC said Mr Musk violated the agreement when he failed to seek a lawyer's approval for a tweet discussing solar roof and vehicle production numbers.

Mr Musk and his lawyers claim the SEC violated the agreement by failing to adhere to an agreed upon timeline for returning the $40m in penalties.