Elon Musk's SEC Settlement Demand

Elon Musk, the CEO of Tesla (NASDAQ:TSLA), has revealed a "settlement demand" from the Securities and Exchange Commission (SEC) regarding his transactions involving Twitter shares.

In a social media update on Thursday, Musk shared a letter from his lawyer, Alex Spiro of Quinn Emanuel, directed to SEC Chair Gary Gensler. The letter outlined the SEC's ultimatum for Musk to accept a settlement, which includes a fine, within a 48-hour timeframe. Failing to comply could result in multiple charges related to his Twitter stock transactions and disclosures.

The SEC's investigation is centered on whether Musk or his associates committed securities fraud in 2022, during the period Musk sold Tesla shares and increased his stake in Twitter. This scrutiny is particularly significant given Musk's leveraged buyout of the social media platform, now known as "X."

Musk's post included a personal comment addressed to Gensler, saying, "Oh Gary, how could you do this to me?" and featured an emotional emoji alongside the attorney's letter. In another post, he shared an AI-generated image portraying Gensler as a snail, calling it "very flattering."

However, a source close to the investigation, speaking anonymously due to the nature of the information, informed CNBC that Musk was afforded more time beyond the initial 48 hours to respond to the SEC offer. The source also indicated that if a settlement isn’t reached, charges are not guaranteed; the SEC could issue a Wells Notice instead, which is a precursor to recommendations from enforcement staff to the agency's commissioners on whether to file charges.

As of Thursday, there has been no response from Gensler, Musk, or Spiro regarding the matter.

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