Elon Musk received SEC settlement demand over Twitter share dealings

Elon Musk, the CEO of Tesla (NASDAQ:TSLA), has made public a “settlement demand” from the Securities and Exchange Commission (SEC) concerning his dealings with Twitter shares. In a social media update on Thursday, Musk shared a letter from his lawyer, Alex Spiro of Quinn Emanuel, directed to SEC Chair Gary Gensler. The letter outlined the SEC’s ultimatum to Musk to accept a settlement, which includes a fine, within a 48-hour timeframe or be charged with multiple counts related to his transactions and disclosures of Twitter stock.

The SEC’s investigation is focused on whether Musk or his associates engaged in securities fraud in 2022 during the period in which Musk sold Tesla shares and increased his ownership in Twitter. This scrutiny comes before Musk’s highly publicized leveraged buyout of the social media platform, which he now refers to as “X.”

Musk’s social media post included a personal remark to Gensler, saying, “Oh Gary, how could you do this to me?” accompanied by an emotional emoji and the letter from his attorney. In another post, Musk shared an AI-generated image depicting Gensler as a snail, which he described as “very flattering.”

Contrary to the letter’s implications, a source close to the investigation, who wished to remain anonymous due to the sensitivity of the information, informed CNBC that Musk had been given an extended period beyond 48 hours to respond to the SEC’s settlement offer. The source also indicated that if a settlement is not reached, charges are not an inevitable next step. Instead, the SEC may issue a Wells Notice, which precedes recommendations from enforcement staff to the agency’s commissioners, who then determine whether to proceed with filing charges.

As of Thursday, neither Gensler, Musk, nor Spiro had responded to inquiries for comments on the matter.

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