Did Elon Musk Trigger New Legal Headache With SEC ‘Bastards’ Comment?

Billionaire entrepreneur Elon Musk has a history of making controversial and inflammatory public comments that trigger legal headaches – for him personally, and for his electric vehicle empire. He may have done so again with fiery remarks and insults about the Securities and Exchange Commission settlement over his failed 2018 plan to take Tesla private.

Musk was a featured guest at the TED2022 conference in Vancouver on Thursday and spent much of his time on stage with TED chief Chris Anderson discussing his proposal to buy Twitter and take it private. That triggered an additional response from Musk that included referring to SEC regulators as “bastards.” Although he and Tesla each agreed to pay the regulator $20 million fines for his seemingly false “funding secured” tweet in September 2018 and Musk gave up his role as company chairman, he said today he was coerced into that settlement.

“Funding was actually secured. I want to be clear about that. It’s maybe a good opportunity to clarify that,” Musk said in the interview. “I don’t mean to blame everyone at the SEC but certainly the San Francisco office, because the SEC knew that funding was secured but they pursued an active public investigation nonetheless.”

He did not elaborate on what the source of that funding was. At the time of his privatization tweets, he was in discussions with Saudi Arabia’s Public Investment Fund, which acquired a 4.9% Tesla stake in 2018. The fund subsequently sold off most of its Tesla shares and has instead boosted investment in electric vehicle startup Lucid Motors. Musk said he had to settle with the SEC to prevent a financial crisis that could have led to Tesla’s assets being seized.

“At the time, Tesla was in a precarious financial situation and I was told by the banks that if I did not agree to settle with the SEC, that they would, the banks would, cease providing working capital and Tesla would go bankrupt immediately,” he said. “That’s like having a gun to your child’s head. So I was forced to concede to the SEC unlawfully, those bastards. … It makes it look like I lied when I did not in fact lie. I was forced to admit that I lied to save Tesla’s life and that’s the only reason.”

Cory Jarvis, a spokesman for the SEC, declined to comment on Musk’s remarks.

His statements today look problematic based on terms he agreed to in September 2018 to resolve the SEC matter. Specifically, he seems to have run afoul of a requirement that he “will not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis” and “will not make or permit to be made any public statement to the effect that Defendant does not admit the allegations of the complaint.”

Tesla didn’t respond to a request for comment on the matter. The company’s shares fell 3.7% to $985 in Nasdaq trading on Thursday.