Mark Uyeda the only commissioner to vote against the lawsuit against Elon Musk

The Securities and Exchange Commission (SEC) has initiated a legal action against Elon Musk for failing to promptly disclose his acquisition of over 5% of Twitter (now X) shares in 2022. 

However, a recent report by Reuters reveals that Mark Uyeda, interim chairman of the SEC, was the only commissioner to oppose this decision. The internal vote behind closed doors marked a significant rift within the agency, while the regulatory body is facing significant changes under the administration of Donald Trump, with a reduction in punitive actions against cryptocurrencies.

SEC: Mark Uyeda against the lawsuit against Elon Musk

The decision to sue Musk was made following an investigation initiated in 2022, which led to the formal charge against the magnate on January 14. According to the SEC, Elon Musk allegedly violated federal securities laws by not promptly notifying the agency of his acquisition of a significant stake in Twitter. 

According to the official indictment document, the delay in the declaration would have allowed Musk to purchase shares at lower prices, thus saving at least 150 million dollars. These events prompted four out of five commissioners to vote in favor of the legal action. Mark Uyeda, however, decided to oppose, distinguishing himself from the other members of the regulatory agency, including Commissioner Hester Pierce.

SEC and the new regulatory strategy of the Trump administration

The SEC’s approach towards legal actions and regulations changed with Donald Trump’s administration. The agency seems to have adopted a softer line, particularly in the cryptocurrency sector, dropping cases against major players in the industry like Ripple, OpenSea and Coinbase. This strategy has generated criticism in the financial world, with some experts viewing this choice as a form of deregulation that could create instability in the market.

Another element that has fueled the debate is the appointment of Elon Musk as the head of the Department of Government Efficiency (DOGE), a new body created by the Trump administration with the aim of reducing bureaucracy and federal regulations. The closeness between Musk and the administration has raised questions about the possibility that his governmental role could influence the decisions of the regulatory body, including his case with the SEC.

SEC in crisis: the exodus of employees grows

In addition to the changes in regulation, the SEC is facing another internal challenge: a significant exodus of its employees. According to some sources, hundreds of workers are reportedly leaving the agency, a situation that could impact the entity’s ability to perform its oversight function on the bull and bear markets.

This crisis coincides with the downsizing of regulatory bodies by the Trump presidency, reinforcing the idea of a more permissive strategy towards large companies and the main players in the financial sector.

The Impact of the lawsuit against Musk and future prospects

The lawsuit initiated by the SEC against Musk remains at the center of attention, especially because it is unclear whether the agency, in light of the new regulatory course, might decide to withdraw the legal action before the conclusion of the trial. The precedent of the dismissed cases against crypto companies could suggest a possible change of direction even in the case of Musk.

The position of Mark Uyeda, the only commissioner opposed to the case, could become a key point in this matter, influencing possible future changes in the agency’s strategy. It remains to be seen what the actual impact of the SEC’s new approach will be and whether the case against Musk will end with a trial or end up being shelved, as has happened with other recent legal actions.

The evolving situation demonstrates how regulation in the financial and technology sectors is undergoing a phase of profound transformation, with policies increasingly oriented towards deregulation and the reduction of barriers for large companies.