Tesla CEO Elon Musk blasts SEC over 'unrelenting investigation'

Yahoo Finance's Alexis Keenan details Tesla's CEO Elon Musk's latest spat with the SEC.

Video transcript

BRIAN CHEUNG: Well, it's a tussle that we know all too well. Elon Musk and the Securities and Exchange Commission, the latest development that the company's attorneys actually sent a letter to the SEC, accusing them of perhaps harassing the head of Tesla in relation to that 2018 agreement that settled civil securities charges against the billionaire for some tweets that he had. Let's bring in Yahoo Finance's Alexis Keenan, who's got the details on the latest developments. Alexis.

ALEXIS KEENAN: Hey, Brian. So yeah, Musk and Tesla, their lawyers are saying that the SEC engaged in unrelenting investigation, targeting him and Tesla, targeting both Musk and Tesla, and that the SEC is essentially chilling Musk's First Amendment rights to free speech. The accusations were made today in a letter that was sent by these attorneys for Musk and the company. It was filed in the federal district court in Manhattan, saying that the SEC is ignoring the court's order by withholding $40 million in settlement funds from Tesla shareholders that Musk and Tesla paid as penalties for Musk's 2018 tweet, saying that he had secured funds to take Tesla private.

Now that tweet is just one in a string of tweets about Tesla that has caused, as you say, Musk to tussle with the SEC for a number of years now, at least back to 2018. In 2019, the SEC asked the judge to hold Musk in contempt for another tweet. And that one was about Tesla saying that it had a production outlook that it necessarily couldn't-- or hadn't backed up at the time.

So in addition to that, we have just last week, we had learned in filing by the company on November 16 that the company said on November 16 that the SEC had served yet another subpoena on Musk and Tesla, asking for compliance information with that 2018 settlement. Now that came just 10 days after Musk had tweeted asking if he should sell 10% of his stake in the company.

And so I want to read a little bit of that letter from these lawyers. They wrote, simply stated, the SEC has failed to comply with its promise to pay Tesla shareholders the $40 million it collected as part of the settlement and that it purports to be holding for them. Instead, it has been devoting its formidable resources to endless, unfounded investigations into Musk and Tesla.

Now the lawyers go on to ask the court for a conference that will hear them out to focus on why the SEC has failed to distribute these funds so far and also why the SEC has permitted-- has been permitted, rather, to issue subpoenas asking for information from Tesla and from Musk without court approval. These lawyers think that the court should be involved here because the court was involved in this original settlement and consent decree for this $40 million. So they also say that the SEC has taken 1,200 plus days to distribute these funds to the company's shareholders. So they want to be heard on that, Brian.

BRIAN CHEUNG: Yeah, good reminder maybe just in general to never tweet. But Yahoo Finance's Alexis Keenan, thanks so much for breaking all that down for us.