Interim SEC chief cast sole vote against suing Musk

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NEW YORK: A few days before the Republicans took over the US Securities and Exchange Commission in January, five commissioners from the agency voted a closed door to prosecute Elon Musk.

Since 2022, the agency has been investigating whether a close ally of the upcoming President Donald Trump, the billionaire, has violated the laws of securities by revealing the purchase of Twitter shares this year before acquiring the company.

Three sources said four of the five commissioners, including Republican Hyster Paris, voted yes. People said that the fifth – Republican Mark Yeda, who is now the acting head of the SEC – did not vote.

One week after being in favor of 4-1, the SEC filed a lawsuit against Musk on January 14. Details of the vote-including Yoda’s disagreement-has been reported for the first time.

In the days before the vote, Yeda pressed the implementation staff involved in the Musk case to sign the promises that according to two sources, the matter was not running through politics. The attempt was first reported by Bloomberg News. Sources told Reuters that the staff refused to sign the pledge, as it was not a SEC practice.

Two of the sources said that Yeda and his colleague Republican Paris wanted to play a smile with the SEC. However, Paris joined the vote to vote with three Democrats.

A SEC spokesperson refused to comment on the agency and Yeda’s vote or the Musk case. The SEC also refused to request public records by Reuters for voting records. Paris, Kasturi, his lawyer and the White House did not answer Reuters’ questions.

Under US law, investors who collect more than 5.0 % of a company’s outstanding shares have to be disclosed within 10 days. In April 2022, Musk’s disclosure increased the price of Twitter shares by 27 % in the past. Since the Musk revealed 21 days after his purchase, the SEC has said, he was able to buy more shares at low prices, eventually allowing him to save 150 million Million on Twitter acquisition. Twitter shareholders have also sued a muscle for fraud.

Intended to check.

In addition to the time of their disclosure, the agency investigators examined whether they could prove any intention behind the fileting, which could lead to more serious allegations, according to two sources and the third person with investigations.

Musk has said that he misinterpreted the principle of SEC’s disclosure and the SEC eventually did not bring any allegations of intention.

Sources said the investigation line and the delay of the Musk increased the time of the investigation. He agreed to be ousted twice in 2022, but then refused to interview for the third time, forcing the SEC to force the court to give its additional testimony. They appeared on October 3, 2024, but this year’s long war ensured that the matter could not be resolved before the election.

In December a month before the case was filed, the SEC tried to settle with a canal. Musk published a copy of his lawyer Alex Spiro’s response to the SEC’s then -chair Genesel, stating that the agency had given 48 hours to agree to fix the investigation or pay a fine to face civil charges. Both sides were not settled.

Six legal experts interviewed by Reuters asked why the SEC took so much time to bring a late filing case.

“They could have taken it closer to the time of behavior,” said Howard Fisher, a law firm, working in the SEC under President Barack Obama and President Trump. “But bring it to the last minute – literally – it loses the credibility. It is a problem for any agency, especially when it comes to clearly dealing with such a political issue.”

Nevertheless, some people said that not bringing a case would raise questions about the implementation of US laws. “This is certainly not a century violation, but if we care about fair markets and fair implementation, it will be a very independent agency, a humiliating for the SEC, which will be seen backing.”

Musk had quarreled with the SEC since 2018 when the agency tweeted that he had received funds to take his electric car maker Tesla private. Since then, Kasturi has repeatedly made the SEC joke, and has called it a “completely broken organization”.

According to the court filed in court on Thursday, Musk has till April 4 to respond to the summons till April 4. Trump issued an executive order, accusing the former president Joe Biden of investigating politically politically, and directed to review the cases in the last four years. The SEC spokesman refused to comment on the review.