SEC Chair Gary Gensler has sent a stern warning to Elon Musk, demanding a settlement payment within 48 hours to avoid potential charges. The Securities and Exchange Commission is reportedly gearing up to bring multiple charges against Musk, although the specifics of these charges and the extent of his involvement in the alleged misconduct remain unclear.
Musk’s attorney, Alex Spiro, has also been dragged into the fray, with the SEC issuing a subpoena and threatening legal action if he fails to comply. The escalating tensions between Musk and the SEC have been the subject of much speculation and debate in recent days.
The SEC’s investigation into Musk centers around his delayed disclosure of a 9.2% stake in Twitter. Musk only revealed his stake on April 4, 2022, well after the ten-day deadline mandated by the Hart-Scott-Rodino Act for disclosing substantial ownership in a public company. Despite agreeing to cooperate with the SEC’s investigation in May 2024, Musk has allegedly failed to comply with deposition requests, prompting the SEC to seek sanctions against him in a San Francisco court.
Reacting to Gensler’s latest action, legal experts have weighed in on the implications of the SEC’s aggressive tactics. Pro-XRP lawyer John Deaton has criticized the SEC’s treatment of Musk, highlighting the disparity in resources between a billionaire like Musk and smaller businesses or entrepreneurs who may face even harsher treatment. Deaton pointed to past cases, such as the SEC’s actions against LBRY and Ripple, where companies have been subjected to costly legal battles that can potentially bankrupt them.
The ongoing saga between Musk and the SEC underscores the high stakes involved in regulatory compliance for high-profile individuals and corporations. As the deadline for Musk’s settlement payment looms, the outcome of this showdown will undoubtedly have far-reaching consequences for both Musk and the broader financial community. Stay tuned for further developments as this story continues to unfold.