US SEC seeks to close Musk, Tesla settlement fund

Résumé détaillé

NEW YORK, Nov 10 : The US Securities and Exchange Commission said on Tuesday it completed distributions from a $40 million fund created from civil fines paid by Elon Musk and his electric vehicle company Tesla to resolve the regulator's first civil enforcement case against the world's richest person.

In a filing in Manhattan federal court, the SEC asked a federal judge to close the Fair Fund, created after Musk settled the SEC case in 2018 charging him with securities fraud for posting on August 7, 2018, that he had "funding secured" to potentially take Tesla private.

His posts on Twitter that day caused Tesla's shares and trading volume to spike, with the shares closing more than 6 per cent higher than when he began posting. They later fell after it became clear Musk had not lined up financing.

Musk and Tesla each paid a $20 million civil fine, with sums designated for investor victims of the alleged fraud. Neither defendant admitted wrongdoing. Musk also agreed to let Tesla lawyers review some Twitter posts in advance, and give up his role as chairman.

The SEC said a claims administrator distributed $41.53 million, including interest and after deducting fees, to 3,350 eligible claimants.

Those claimants received 51.7 per cent of their approved claims because their losses exceeded the Fair Fund's size. Another 3,046 claims were rejected.

The SEC said the approximately $449,000 remaining in the Fair Fund will go to the US Treasury.

The case is separate from the SEC case accusing Musk of waiting 11 days too long in March and April 2022 to disclose his early purchases of Twitter shares.

Musk settled that case by having a trust in his name pay $1.5 million, also without admitting wrongdoing.

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