{"id":1490969,"date":"2022-05-25T07:15:32","date_gmt":"2022-05-25T11:15:32","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1490969"},"modified":"2022-05-25T07:15:37","modified_gmt":"2022-05-25T11:15:37","slug":"in-a-faceoff-with-elon-musk-the-sec-blinked","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/in-a-faceoff-with-elon-musk-the-sec-blinked\/","title":{"rendered":"In a Faceoff with Elon Musk, the SEC Blinked"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fin-a-faceoff-with-elon-musk-the-sec-blinked%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1490969&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><\/div>\n<div class=\"article-body__context_widget__1xxEe article-body__element__2p5pI\">\n<div class=\"context-widget__tabcontainer__7d2ES\"><button class=\"context-widget__scroll__3-ZMf context-widget__left__1l1d8\" type=\"button\" disabled aria-label=\"Scroll tabs left\"><\/button><\/p>\n<ul role=\"tablist\" class=\"context-widget__tabs__18YJD\">\n<li data-testid=\"Text\" role=\"tab\" aria-selected=\"true\" tabindex=\"0\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__default__UPMUu context-widget__tab__1XBL- context-widget__selected__B55Vo\">Summary<\/li>\n<li data-testid=\"Text\" role=\"tab\" aria-selected=\"false\" tabindex=\"-1\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__default__UPMUu context-widget__tab__1XBL-\">Companies<\/li>\n<\/ul>\n<p><button class=\"context-widget__scroll__3-ZMf context-widget__right__2iQ-B\" type=\"button\" disabled aria-label=\"Scroll tabs right\"><\/button><\/div>\n<div class=\"context-widget__content__1X4Oq\">\n<ul class=\"summary__summary__31feP\">\n<li data-testid=\"Body\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__body__yKS5U body__base__22dCE body__body_alt__2kEQu summary__point__NO-2F\">Judge&#8217;s remarks in 2019 knocked SEC&#8217;s confidence court would back them<\/li>\n<li data-testid=\"Body\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__body__yKS5U body__base__22dCE body__body_alt__2kEQu summary__point__NO-2F\">Core issue &#8211; what is &#8220;material&#8221; information &#8211; was left to Musk and Tesla to decide<\/li>\n<li data-testid=\"Body\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__body__yKS5U body__base__22dCE body__body_alt__2kEQu summary__point__NO-2F\">As some tweets went unvetted, SEC opted to urge Musk to comply, rather than go to court<\/li>\n<li data-testid=\"Body\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__body__yKS5U body__base__22dCE body__body_alt__2kEQu summary__point__NO-2F\">SEC was also uneasy about risk of starting litigation given Musk&#8217;s resources<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<p data-testid=\"paragraph-0\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">WASHINGTON, May 24 (Reuters) &#8211; U.S. securities regulators have pulled their punches in dealings with Elon Musk largely because an April 2019 court hearing on a statement he made about Tesla on Twitter didn&#8217;t go their way, according to four sources with knowledge of the matter.<\/p>\n<p data-testid=\"paragraph-1\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">The U.S. Securities and Exchange Commission (SEC) asked the court to hold the billionaire in contempt, saying a tweet by the Tesla Inc. <a data-testid=\"Link\" href=\"https:\/\/www.reuters.com\/companies\/TSLA.O\" target=\"_blank\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__large__nEccO link__underline_default__2prE_\" rel=\"noopener\">(TSLA.O)<\/a> CEO &#8211; which forecast production at the carmaker &#8211; violated a court agreement Musk signed the previous year to have some of his communications vetted by a lawyer.<\/p>\n<p data-testid=\"paragraph-2\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">By trying to rein in his comments, the SEC was veering into relatively uncharted territory. SEC rules require that public companies and their executives disclose accurate information that may be material to investors via channels that investors know to monitor. It doesn&#8217;t usually specify how companies should do that.<\/p>\n<div class=\"registration-prompt__container__2jf5K registration-prompt__inline__2WDU- article-body__element__2p5pI article-body__inline-registration-prompt__1-N9W\">\n<div class=\"registration-prompt__text-content__o0YET\">\n<h5 data-testid=\"Heading\" class=\"text__text__1FZLe text__white__3r45t text__medium__1kbOh text__heading_5__2krbj heading__base__2T28j heading__heading_5__2A2g- registration-prompt__heading__3fq-h\">Register now for FREE unlimited access to Reuters.com<\/h5>\n<p><button data-testid=\"button\" class=\"button__button__2Ecqi button__secondary__18moI button__round__1nYLA text-button__container__3q3zX registration-prompt__button-text__3kTtQ\" type=\"button\"><\/p>\n<p><span data-testid=\"Text\" class=\"text__text__1FZLe text__inherit-color__3208F text__bold__2-8Kc text__default__UPMUu text-button__medium__113uZ\">Register<\/span><\/p>\n<p><\/button><\/div>\n<\/div>\n<p data-testid=\"paragraph-3\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">But the 2019 remarks by judge Alison Nathan \u2013 who found the terms of the agreement between Musk and the SEC to be &#8220;soft&#8221; and urged them to reach an understanding \u2013 knocked confidence among officials overseeing the case that the courts would support them if they attempted to prosecute his activity on Twitter <a data-testid=\"Link\" href=\"https:\/\/www.reuters.com\/companies\/TWTR.N\" target=\"_blank\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__large__nEccO link__underline_default__2prE_\" rel=\"noopener\">(TWTR.N)<\/a>, the four sources said.<\/p>\n<p data-testid=\"paragraph-4\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Interviews with individuals familiar with the situation \u2013 as well as a review of court documents, SEC and Tesla emails obtained by the media through a public records request \u2013 showed that in the wake of Nathan&#8217;s comments, SEC officials opted to urge Musk to comply with the agreement, rather than pursuing enforcement through the courts.<\/p>\n<p data-testid=\"paragraph-5\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Spokespeople for the SEC declined to comment on its enforcement dealings with Musk. Spokespeople for Tesla and Twitter and a representative for Judge Nathan did not respond to requests for comment for this story.<\/p>\n<p data-testid=\"paragraph-6\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Musk&#8217;s attorney, Alex Spiro, did not respond to requests for comment on the SEC&#8217;s deliberations, but court records and Tesla emails show he and other lawyers for the Tesla boss dispute that Musk&#8217;s tweets violated the agreement.<\/p>\n<p data-testid=\"paragraph-7\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">With Musk&#8217;s use of social media under scrutiny after he bid to purchase Twitter, the interviews and documents shed light on the regulator&#8217;s view of its relationship with the billionaire, now the world&#8217;s richest man. He has 95 million Twitter followers and called the SEC &#8220;bastards&#8221; in an interview in April <a data-testid=\"Link\" href=\"https:\/\/www.reuters.com\/technology\/musk-says-us-sec-bastards-forced-settlement-over-tesla-tweets-2022-04-14\/\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__large__nEccO link__underline_default__2prE_\"> read more <\/a>.<\/p>\n<p data-testid=\"paragraph-8\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">The sources said they are not familiar with the current thinking of the SEC, which has been under new leadership since President Joe Biden took office in January 2021. Under new Chair, Gary Gensler, the agency has pledged to crack down on repeated misconduct and push for tougher penalties.<\/p>\n<p data-testid=\"paragraph-9\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">It recently opened more investigations into Musk. Among them, a probe into two of his November tweets asking if he should sell shares in Tesla, court documents regarding Musk&#8217;s settlement with the SEC show.<\/p>\n<p data-testid=\"paragraph-10\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Nathan was promoted to the New York-based 2nd U.S. Circuit Court of Appeals in March. A newly assigned judge in the case, Lewis Liman, ruled in the SEC&#8217;s favor last month.<\/p>\n<h2 data-testid=\"Heading\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__heading_5__2krbj heading__base__2T28j heading__heading_5__2A2g-\">&#8220;MATERIAL INFORMATION&#8221;<\/h2>\n<p data-testid=\"paragraph-11\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">The SEC&#8217;s fight with Musk started on Aug. 7, 2018, when the CEO, whose company had been telling investors to monitor his Twitter feed since 2013, sent Tesla shares soaring by tweeting &#8220;funding secured&#8221; to take the publicly listed company private. The SEC opened an investigation: It found Musk at the time had not even discussed key deal terms with any potential funding source, SEC court filings later showed.<\/p>\n<p data-testid=\"paragraph-12\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Musk says funding was secured <a data-testid=\"Link\" href=\"https:\/\/www.reuters.com\/business\/autos-transportation\/musk-asks-us-judge-end-2018-sec-consent-decree-2022-03-08\/\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__large__nEccO link__underline_default__2prE_\"> read more <\/a>.<\/p>\n<p data-testid=\"paragraph-13\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">In September 2018, agency officials told Musk he had a choice: Fight stiff charges over the tweet in court or settle and suffer lesser penalties, one of the sources said. Tesla shares were around $300 compared with more than $630 today after a five-for-one stock split in 2020. Musk agreed to settle.<\/p>\n<p data-testid=\"paragraph-14\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">During the April 4, 2019 hearing, in comments to the SEC about the settlement&#8217;s language on what tweets should be vetted, Nathan said, &#8220;This case is unusual.&#8221; Her exploration of the terms of the settlement has not previously been reported in detail.<\/p>\n<p data-testid=\"paragraph-15\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">The settlement required Tesla to establish a process for overseeing all of Musk&#8217;s communications about the company, including hiring or designating an &#8220;experienced securities lawyer&#8221; to vet social media posts. Musk also agreed that he would certify in writing that he had complied, and provide proof; and to step down as Tesla chair while remaining CEO. No end-date was set for the arrangement.<\/p>\n<p data-testid=\"paragraph-16\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">The vetting process required that Musk seek pre-approval for written communications \u2013 including tweets \u2013 that contained &#8220;or reasonably could contain&#8221; information material to Tesla shareholders.<\/p>\n<p data-testid=\"paragraph-17\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">But the decision on whether they contained material information was left to Musk and Tesla.<\/p>\n<p data-testid=\"paragraph-18\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Less than six months later, on Feb. 19, 2019, Musk tweeted that Tesla would make &#8220;around 500k&#8221; cars that year. If unvetted, this was arguably a violation of the settlement because production figures can be market sensitive information, SEC officials said in court filings.<\/p>\n<p data-testid=\"paragraph-19\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">The SEC staff asked Tesla whether Musk had submitted the tweet for vetting. He had not, Tesla attorneys told the SEC. The SEC said in the court complaint that when it looked into the Feb. 2019 tweet, it found Musk had not sought pre-approval for any Tesla-related tweets since the vetting system started. Its attorney told the court, &#8220;Mr. Musk has tweeted upward of 80 times about Tesla, and the SEC thought nothing of it. We assumed that everyone was proceeding in good faith.&#8221;<\/p>\n<p data-testid=\"paragraph-20\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Tesla attorneys said in a court filing Musk had not sought pre-approval because he &#8220;has not tweeted material information regarding Tesla.&#8221;<\/p>\n<h2 data-testid=\"Heading\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__heading_5__2krbj heading__base__2T28j heading__heading_5__2A2g-\">&#8220;REASONABLENESS PANTS&#8221;<\/h2>\n<p data-testid=\"paragraph-21\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">For SEC officials, Musk&#8217;s violation was clear, four of the sources told Reuters.<\/p>\n<p data-testid=\"paragraph-22\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">In April 2019 they went to the New York court to argue that Musk should be held in contempt of court \u2013 a serious charge that can result in fines or jail. The SEC wanted the court to order Musk to report monthly to the agency on his compliance and enforce escalating fines for violations, its lawyer told the judge at the hearing.<\/p>\n<p data-testid=\"paragraph-23\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">SEC officials felt they had the upper hand because they believed the violation was unambiguous, said the four sources, two of whom have direct knowledge of the matter.<\/p>\n<p data-testid=\"paragraph-24\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Following a 1976 Supreme Court ruling, the SEC&#8217;s rules have defined material information that a public company must disclose as matters &#8220;a reasonable investor&#8221; would likely consider important. The regulator&#8217;s requirement in the deal with Musk was broader than that, it told the court: &#8220;We would argue it essentially means unless something is obviously immaterial, it needs to get pre-approval.&#8221;<\/p>\n<p data-testid=\"paragraph-25\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Musk&#8217;s lawyers told the court the SEC&#8217;s interpretation of the settlement&#8217;s vetting requirements was &#8220;incorrect&#8221; and &#8220;overbroad.&#8221;<\/p>\n<p data-testid=\"paragraph-26\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Judge Nathan challenged what she described as the settlement&#8217;s &#8220;soft&#8221; standard for assessing when a tweet was material, the court transcript shows; she also agreed with Musk&#8217;s lawyer that the SEC should have tried to resolve the issue out of court, saying, &#8220;This screams of working it out.&#8221;<\/p>\n<p data-testid=\"paragraph-27\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Nathan did not conclude whether the tweets were material, or rule on the contempt motion, saying: &#8220;My call to action is for everybody to take a deep breath, put your reasonableness pants on, and work this out.&#8221;<\/p>\n<p data-testid=\"paragraph-28\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">SEC officials felt they had no choice but to revise the settlement, according to the four sources. The SEC, Tesla and Musk agreed to be more specific about what comments must be pre-approved \u2013 including statements about Tesla&#8217;s financial condition, proposed or potential deals, production numbers, and performance projections.<\/p>\n<p data-testid=\"paragraph-29\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Nathan approved that revised agreement on April 30, 2019.<\/p>\n<h2 data-testid=\"Heading\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__heading_5__2krbj heading__base__2T28j heading__heading_5__2A2g-\">THE TWEETS GO ON<\/h2>\n<p data-testid=\"paragraph-30\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">In the following months, SEC officials felt Musk pushed the boundaries of the revised settlement but were reluctant to return to court, fearing Nathan might reject their complaint and admonish them for bringing the issue back, three sources said.<\/p>\n<p data-testid=\"paragraph-31\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">On July 29, 2019, Musk tweeted that he was hoping to manufacture &#8220;1,000 solar roofs&#8221; a week by year-end; and on May 1, 2020 that Tesla&#8217;s stock price was &#8220;too high.&#8221; Each tweet prompted the SEC to contact Tesla and Musk&#8217;s attorneys seeking information on whether they had been pre-approved, according to SEC correspondence sent to Tesla on the matter obtained by public records requests.<\/p>\n<p data-testid=\"paragraph-32\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Musk had not sought pre-approval; Tesla&#8217;s attorneys argued in the emails to the SEC it wasn&#8217;t necessary. The regulator disagreed. The SEC said in emails it was trying to work out the dispute &#8220;in the spirit of the Court&#8217;s directive&#8221; but that Tesla and Musk&#8217;s attorneys had declined to provide requested documents, or have a &#8220;productive dialogue&#8221; with SEC staff.<\/p>\n<p data-testid=\"paragraph-33\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">In June 2020, the SEC emailed Musk advising him it was the &#8220;SEC&#8217;s position that you violated&#8221; the settlement.<\/p>\n<p data-testid=\"paragraph-34\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Instead of returning to court, however, the SEC said: &#8220;Going forward, we urge you to comply.&#8221;<\/p>\n<p data-testid=\"paragraph-35\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Some SEC officials felt the settlement constrained Musk to some degree, which helped protect investors, said the four sources.<\/p>\n<p data-testid=\"paragraph-36\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">The SEC also was uneasy about the risks of the most extreme step \u2013 scrapping the deal and starting litigation \u2013 given Musk&#8217;s resources, four of the sources said.<\/p>\n<p data-testid=\"paragraph-37\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">In addition, Musk was and remains Tesla&#8217;s largest shareholder, with roughly 16% of the stock as of late April, so it might be hard to argue that barring him as a public company director or officer was in shareholders&#8217; interests or would loosen his grip on Tesla, two of the sources said.<\/p>\n<p data-testid=\"paragraph-38\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">In March, Musk asked the court to void his settlement with the SEC.<\/p>\n<p data-testid=\"paragraph-39\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">The new judge in the case, Liman, rejected Musk&#8217;s appeal in April. He found the billionaire was &#8220;bemoaning&#8221; the 2018 deal now that he felt Tesla was &#8220;invincible&#8221; L2N2WP1WY. A representative for the court said Liman would not comment.<\/p>\n<div class=\"registration-prompt__container__2jf5K registration-prompt__inline__2WDU- article-body__element__2p5pI\">\n<div class=\"registration-prompt__text-content__o0YET\">\n<h5 data-testid=\"Heading\" class=\"text__text__1FZLe text__white__3r45t text__medium__1kbOh text__heading_5__2krbj heading__base__2T28j heading__heading_5__2A2g- registration-prompt__heading__3fq-h\">Register now for FREE unlimited access to Reuters.com<\/h5>\n<p><button data-testid=\"button\" class=\"button__button__2Ecqi button__secondary__18moI button__round__1nYLA text-button__container__3q3zX registration-prompt__button-text__3kTtQ\" type=\"button\"><\/p>\n<p><span data-testid=\"Text\" class=\"text__text__1FZLe text__inherit-color__3208F text__bold__2-8Kc text__default__UPMUu text-button__medium__113uZ\">Register<\/span><\/p>\n<p><\/button><\/div>\n<\/div>\n<p><span data-testid=\"Text\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__default__UPMUu sign-off__text__PU3Aj\">Additional reporting by Katanga Johnson in Washington, Hyunjoo Jin in San Francisco, and Jonathan Stempel, Jody Godoy, Gui Qing Koh and Herbert Lash in New York; Edited by Paritosh Bansal, Sara Ledwith and Daniel Flynn<\/span><\/p>\n<p data-testid=\"Body\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__large__nEccO body__base__22dCE body__large_body__FV5_X article-body__element__2p5pI\">Our Standards: <a data-testid=\"Link\" href=\"https:\/\/www.thomsonreuters.com\/en\/about-us\/trust-principles.html\" target=\"_blank\" class=\"text__text__1FZLe text__dark-grey__3Ml43 text__medium__1kbOh text__large__nEccO link__underline_default__2prE_\" rel=\"noopener\">The Thomson Reuters Trust Principles.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>SummaryCompaniesJudge&#8217;s remarks in<\/p>\n","protected":false},"author":498,"featured_media":1888598,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1490969","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1490969","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/498"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1490969"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1490969\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1888598"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1490969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1490969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1490969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}