Jonathan Stempel

NEW YORK (Reuters), Tesla Inc and Elon Musk its Chief Executive, have accused the U.S. Securities and Exchange Commissions (SEC) (US) of harassment them by launching an “endless and relentless” investigation into Musk’s criticism of the government.

In a letter, the accusation was sent to U.S. district Judge Alison Nathan (New York), who presided over a 2018 SEC Settlement stemming out of Musk’s tweet concerning a possible Tesla buyout.

Alex Spiro (a Musk and Tesla lawyer) wrote, “Mr. Musk & Tesla respectfully seek to correct their course.” It is enough.

The SEC refused to comment.

Musk’s fight with regulators escalates in Thursday’s letter as they examine his social media posts, and Tesla’s treatment workers including allegations of discrimination.

The disclosure by Tesla on February 7, that it received a subpoena form the SEC regarding its compliance to the 2018 settlement, led to this change.

Musk was sued by the SEC in August 2018, after tweeting that he had secured funding to take his electric vehicle company private for $420 per share. Musk was far from being able to buy out the company.

Tesla and Musk reached a settlement by agreeing each to pay $20 million civil penalties and to allow Tesla lawyers to review some of Musk’s communications, including any tweets that might affect Tesla’s stock price. Musk also resigned his chairmanship of Tesla.

Ten days after Musk polled Twitter followers about whether to sell 10% or more of his Tesla stake, the most recent subpoena was sent on November 16.

CHILLING SPEECH

Spiro, in Thursday’s letter to the SEC, accused it of not distributing to shareholders $40 million in fines and instead “devoting its formidable resource to endless, unfounded inquiries” into Musk or Tesla.

Spiro said that the SEC appears to have targeted Mr. Musk, Tesla and other individuals for an unrelenting investigation. This is mainly because Mr. Musk has been an outspoken critic to the government. The SEC’s large-scale efforts appear to have been designed to dampen his exercising of First Amendment rights.

Nathan was requested by Spiro for a conference. He wanted to know why Nathan “issuing unilateral subpoenas without court approval” and why money isn’t being distributed.

If Musk is found to have violated settlement terms, the SEC can ask Nathan for a reopening of the case or new charges.

Eight days ago, California’s Department of Fair Employment and Housing filed suit against Tesla for racial discrimination allegations made by Black workers at the Fremont, California plant.

Tesla called the suit misguided. Tesla is also seeking to decrease or eliminate a jury award of approximately $137 Million to an ex-Black elevator operator, who was sent to hostile conditions at Fremont’s Fremont plant.

The National Highway Traffic Safety Administration launched a formal investigation into 416K Tesla Model 3 and Model Y cars on Thursday after it received complaints regarding unexpected braking related to the Autopilot system.

Tesla has issued 10 recalls, many of them under NHTSA pressure.

Tesla shares dropped 0.7% in morning trading to $916.91

SEC, v Musk. U.S. District Court Southern District of New York. 18-08865, and SEC Inc against Tesla Inc at the same court. 18-08947.