Elon Musk Tweet Appears to Mock the Securities and Exchange Commission

Elon Musk Tweet Appears to Mock the Securities and Exchange Commission

Elon Musk Tweet Appears to Mock the Securities and Exchange Commission

The SEC told CNN Business that it has not changed its name and declined further comment on the tweet.

Shares of Tesla extended earlier losses after Nathan issued her order, and were down $12.78, or 4.3 percent, at $282.02 in late afternoon trading.

Musk and the SEC came to an agreement late last week to settle charges alleging that the billionaire had defrauded investors in statements relating to an August 7 tweet about bringing the company private with "funding secured". By 1:05 p.m. EDT, the electric-car company's stock was down 6.7%. They don't include any provision that would prohibit him from voting, as a director of Tesla, on its new chairman or its new directors.

Musk agreed to pay a $20m fine and step aside as Tesla's chairman for three years. Tesla also suffered a hit, in spite of the company itself not being charged with fraud - it has to pay a $20 million fine as well. The judge's request for additional evidence suggests Tesla may not be out of the woods just yet.

Yet on Friday, Musk fired off another damn-the-consequences tweet, calling the SEC the "shortseller enrichment committee". The deal also requires that Tesla put in place a system for monitoring Musk's public communications about the company, including his tweets.

Even though Musk's Twitter post appears to violate the spirit of the recent settlement, the SEC is largely powerless to stop Musk's tirades until the settlement is approved by Federal Judge Alison Nathan of the Southern District of NY, which could take several weeks. The judge asked for the letter not to exceed 10 pages and to be double-spaced.

U.S. District Judge Alison Nathan allowed one week for the two to provide the letter, and said that the court needs to make a "minimal determination of whether the agreement is appropriate", according to CNBC. "Beyond that, if they feel he hasn't lived up to his deal, they can theoretically seek to pull the settlement". As the settlement is still under review, it will be interesting to see whether the SEC may try to review its stance due to the implication that the agency is acting under the desire to enrich investors and not in the interest of fairness. A higher court eventually sided with the SEC.

"In and of itself it's not an ominous sign", said Jordan Thomas, a partner at Labaton Sucharow and former SEC lawyer. But Dubow said he would be surprised if the judge ultimately rejected the proposed settlement.

"I don't think the SEC would look at this as a denial of the facts alleged", said Peter Henning, a law professor at Wayne State University in Detroit. "It's a high-profile case".

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