Tesla’s (TSLA) CEO, Elon Musk, revealed on social media that the Securities and Exchange Commission (SEC) had issued a “settlement demand” against him. Musk’s post on the social media platform X included a letter from his attorney, Alex Spiro, to SEC Chair Gary Gensler. The letter claimed the SEC pressured Musk to settle within 48 hours or face charges related to “Certain Purchases, Sales, and Disclosures of Twitter Shares.”
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Musk Responds with Humor and Claims Harassment
Musk humorously addressed the situation on X, writing, “Oh Gary, how could you do this to me?” alongside an emoji and Spiro’s letter. However, a source familiar with the probe told CNBC that Musk had more than 48 hours to respond and that charges wouldn’t automatically follow if a settlement wasn’t reached.
If the SEC is unable to reach a settlement with Musk, it may issue a Wells Notice, according to the CNBC report. A Wells Notice allows defendants to respond to the SEC’s charges before the agency’s commissioners decide whether or not to file charges.
Meanwhile, Spiro’s letter, cited by Musk in his post, accused the SEC of “more than six years of harassment,” including reopening an investigation into Neuralink, Musk’s health-tech venture. Spiro also alleged that the SEC’s actions were politically motivated and demanded to know whether the White House influenced the investigation against his client.
Musk Has Clashed with the SEC on Multiple Occasions
The SEC has been investigating Musk for potential securities fraud related to his 2022 transactions, where he sold shares in Tesla (TSLA) and built up a stake in Twitter (now known as X) ahead of his buyout of the social media platform. Securities fraud is a white-collar crime that induces investors to buy or sell stock based on false information.
However, this is not Musk’s first clash with the SEC. In 2018, the agency charged him with securities fraud over a tweet claiming he had “funding secured” to take Tesla private at $420 per share—a deal that never materialized. Following this investigation, Musk and Tesla paid $20 million each in fines, and Musk temporarily relinquished his role as Tesla’s chairman. Since then, Musk has frequently voiced his disdain for the SEC.
Is Tesla a Buy, Sell, or Hold?
Analysts remain sidelined about TSLA stock, with a Hold consensus rating based on 12 Buys, 13 Holds, and nine Sells. Over the past year, TSLA has increased by more than 70%, and the average TSLA price target of $267.79 implies a downside potential of 36% from current levels.
