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Tesla subpoenaed by SEC again days after Elon Musk tweet

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The Securities and Exchange Commission (SEC) issued Tesla a subpoena in November, 10 days after CEO Elon Musk published a tweet asking his followers if he should sell billions of dollars in the company’s stock.

Tesla revealed in a financial filing on Monday that the SEC subpoenaed the company asking for information on its “governance processes around compliance” with a settlement that had previously been reached with the agency.

A federal judge approved a settlement between the SEC and Musk in October 2018, which required Musk to step down as chairman of the company and pay a $20 million civil penalty. It also required that Tesla pay a separate $20 million fee.

The company, however, was not charged with fraud, and Musk remained its chief executive. 

The settlement linked back to a tweet Musk posted in August 2018 in which he said he was mulling taking Tesla private. Shareholders filed a class-action lawsuit arguing that the tweet caused them to lose billions of dollars. Musk, however, has maintained that the tweet was “entirely truthful.” 

The settlement also placed restrictions on Musk’s communications, including messages he posts on Twitter, after the agency accused him of securities fraud when he said he had the funds to go private.

November’s subpoena was issued 10 days after Musk asked his Twitter followers if he should sell 10 percent of his stake in Tesla.

“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?” Musk wrote.

“I will abide by the results of this poll, whichever way it goes,” he added in a separate tweet.

Nearly 58 percent of respondents said they supported Musk’s proposal, and just more than 42 percent said they did not.

Tesla shares fell 16 percent in the next two days of trading, according to Bloomberg.

Tesla did not detail what spurred the subpoena in Monday’s filing. The SEC declined to comment to Bloomberg.

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