Apparently, the richest man in the world is not exempt from bullying.
At least that is how Tesla CEO Elon Musk interprets a Feb. 7 subpoena from the Securities Exchange Commission (SEC) seeking information about Musk’s compliance with a 2018 settlement that requires Musk’s tweets on “material information about the company” be vetted by company lawyers prior to posting.
Musk clearly has irritated the SEC and, more generally, the Biden administration by controversial opinions that seem to have little, if any, relationship to TESLA.
Musk has exercised what many would consider to be his First Amendment right to communicate with his 63 million followers on Twitter (twice as many as Pres. Biden).
He tweeted “Canadian truckers rule” on Jan. 27 in support of Canada’s “Freedom Convey,” an assemblage of truckers who oppose COVID-19 mandates and effectively stopped commerce for a time between the U.S. and Canada at the Ambassador Bridge. In another post, he said: “Freedom is being stripped away one piece at a time until it is gone.”
After the Canadian government ordered banks to block cryptocurrency donations to the convoy, Musk tweeted (and then deleted) a picture of Adolf Hitler and said, “Stop comparing me to Justin Trudeau. I had a budget.” This was called “unacceptable behavior” by Jewish groups, which demanded an apology. Instead, Musk suggested his 63 million Twitter followers read a book about the economic history of Nazi Germany.
Musk is engaged in a personal dispute with U.S. Sen. Elizabeth Warren, D-Mass, who noted in November that Musk paid zero income taxes in 2018. Musk, who takes no salary, is the richest person in the world, with a net worth of $233.6 billion.
Last year, Musk tweeted: “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?” More than half of his Twitter followers responded affirmatively in a twitter poll. Musk sold and donated $5.7 billion worth of Tesla shares to charity.
Musk followed up on Monday with a tweet stating that he will pay the single largest tax bill of any individual in history in 2021 – more than $11 billion. He said he will visit the IRS next time he’s in D.C. to say hi, adding, “Maybe I can have a cookie or something.”
Whether or not Musk is being bullied, his situation does show one thing. Real power is not held in a bank account. It is vested in the ruling political class, which has very little tolerance for ridicule and dissention. Even the richest man in the world has to answer an SEC subpoena.
Musk’s lawyer sent a letter to a federal court judge last week complaining that the SEC is targeting Tesla and Musk “for unrelenting investigation largely because Mr. Musk remains an outspoken critic of the government” and “the SEC’s outsized efforts seem calculated to chill his exercise of first amendment rights.”
The SEC denied it is harassing Musk.
U.S. District Judge Alison Nathan is overseeing a settlement reached by Musk and Tesla in 2018 over a charge of securities fraud.
That case involved tweet by Musk that he had funding to potentially take Tesla private at $420 a share, which led to a 6% jump in Tesla’s stock price. The SEC said Musk knew a deal was far from certain and charged him with securities fraud.
Musk agreed to step down as Tesla’s chairperson and to allow Tesla’s lawyers to vet future tweets that could affect Tesla’s stock price. Musk and Tesla also agreed to each pay a $20 million, which the SEC said would be distributed to harmed investors under a court-approved process.
Musk has embarrassed the SEC by noting it has yet to distribute the $40 million to aggrieved shareholders.