📺 Stream EntrepreneurTV for Free 📺

Elon Musk Seeks to Terminate Tweet-Fueled Fraud Settlement With SEC "The SEC's pursuit of Mr. Musk has crossed the line into harassment, which is quintessential bad faith," his lawyers wrote.

By Amanda Breen Edited by Jessica Thomas

entrepreneur daily

On Tuesday, Tesla CEO Elon Musk asked a federal judge to terminate his 2018 settlement with the Securities and Exchange Commission (SEC), Reuters reports.

In August of 2018, the SEC sued Musk after he tweeted that he had "funding secured" to potentially take Tesla private at $420 per share. The settlement that followed included a $20 million fine for Tesla and a $20 million personal fine for Musk — both of which were to be distributed to shareholders for a total $40 million payout. Additionally, Musk was hit with a so-called "consent order," which requires a Tesla lawyer to review his tweets before they're posted to Twitter.

Related: How a Series of Elon Musk Tweets Helped Lead Investors to Dogecoin, a Meme-Inspired Cryptocurrency Worth 4 Cents

But Musk says the SEC never delivered on its promise, so he's ready to stop upholding his end of the bargain. Musk's lawyers have also asked U.S. District Judge Alison Nathan to block the SEC's subpoena requesting records of pre-approval of his November Twitter poll regarding the potential sale of Tesla shares, writing that "The SEC's pursuit of Mr. Musk has crossed the line into harassment, which is quintessential bad faith."

In the November Twitter poll, Musk announced that he would sell 10% of his Tesla stake if the majority approved — which it did. The price of Tesla stock dipped, and Musk has since sold $16.4 billion worth of shares. The electric-car company said on Tuesday that the Twitter activity in question "is behavior the SEC should encourage: a CEO's transparency with the public and shareholders about a proposed stock sale."

Related: Elon Musk Sells $5 Billion in Tesla Stock

Judge Nathan said in an order on Tuesday that the SEC must respond to Musk's request by March 22, and later that day, the SEC filed a distribution plan to pay Tesla shareholders.

Tesla Inc. was down 4.29% as of 11:18 a.m. EST.

Amanda Breen

Entrepreneur Staff

Senior Features Writer

Amanda Breen is a senior features writer at Entrepreneur.com. She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

These Coworkers-Turned-Friends Started a Side Hustle on Amazon — Now It's a 'Full Hustle' Earning Over $20 Million a Year: 'Jump in With Both Feet'

Achal Patel and Russell Gong met at a large consulting firm and "bonded over a shared vision to create a mission-led company."

Business News

These Are the 10 Most Profitable Cities for Airbnb Hosts, According to a New Report

Here's where Airbnb property owners and hosts are making the most money.

Side Hustle

How to Turn Your Hobby Into a Successful Business

A hobby, interest or charity project can turn into a money-making business if you know the right steps to take.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Productivity

Want to Be More Productive? Here's How Google Executives Structure Their Schedules

These five tactics from inside Google will help you focus and protect your time.

Starting a Business

This Couple Turned Their Startup Into a $150 Million Food Delivery Company. Here's What They Did Early On to Make It Happen.

Selling only online to your customers has many perks. But the founders of Little Spoon want you to know four things if you want to see accelerated growth.