Musk’s lawyer accuses SEC of leaking details of investigation

Musk’s counsel also claims the SEC is targeting Tesla and its CEO because Musk is an outspoken critic of the government.

Tesla CEO Elon Musk
Tesla CEO Elon Musk has claimed the Securities and Exchange Commission failed to pay Tesla shareholders the $40m the agency collected in the 2018 settlement related to his tweeting [File: Aly Song/Reuters]

An attorney for Elon Musk accused the U.S. Securities and Exchange Commission of leaking details of an investigation in response to the billionaire’s latest broadside against the agency.

Alex Spiro, Musk’s outside counsel, claimed in a letter last week that the SEC was targeting Tesla Inc. and its chief executive officer because Musk is an outspoken government critic. Spiro wrote to a judge Monday that at least one SEC staff member responded to this by leaking certain information regarding its probe.

“This leak is emblematic of the vindictive, improper conduct that occasioned my letter,” Spiro wrote. He didn’t elaborate on what information he was accusing the SEC of divulging.

Musk tweeted on Tuesday that his lawyer was “peeling back the first layer of the corruption onion” and told his 74.5 million followers to “stay tuned.”

Musk has waged a pitch battle with the SEC since the agency accused him in September 2018 of committing securities fraud, after he claimed on Twitter to have secured funding to take Tesla private. Musk and Tesla quickly reached a settlement with the agency, though the two sides went to back to court soon after to resolve another dispute related to the CEO’s tweeting.

Earlier this month, Tesla disclosed in a regulatory filing that the SEC had sent a subpoena on Nov. 16 seeking information about the company’s governance processes and compliance with the settlement.

Spiro said in his letter Monday he had requested specific SEC staff to preserve records and devices and reported the matter to the SEC Office of Inspector General.

Press officials for the SEC didn’t immediately respond to a request for comment on the filing. Tesla shares fell 2.3% to $837.14 as of 8:10 a.m. Tuesday, before the start of regular trading.

Musk has claimed the SEC failed to pay Tesla shareholders the $40 million the agency collected in the 2018 settlement related to his tweeting. The SEC said it has taken time to develop a plan given the complexity of the distribution, and it plans to submit one to the judge by the end of March.

(Updates with Musk’s tweet in the fourth paragraph.)
–With assistance from Ben Bain and Dana Hull.

Source: Bloomberg