The U.S. Securities and Exchange Commission (SEC) said it was investigating Tesla CEO Elon Musk over the tweets where proposed to sell 10% of his Tesla stake. The regulator also said it has the legal authority to take Musk to court over his past tweets.
The investigation came to light on Tuesday after the SEC rejected a motion from Musk seeking the dismissal of a 2018 agreement that required certain tweets to be pre-approved by an attorney.
Elon Musk had tweeted up a storm in 2018 and 2021
Musk’s tweet in 2018, where he had said he would take Tesla private if its share price reached $420, had earned a sharp response from the SEC over alleged stock market manipulation. Tesla’s stock price had surged after the tweet, increasing Musk’s personal fortune.
Musk had paid $20 million in fines to the SEC over the tweet. He had also stepped down as Tesla’s board chairman, and agreed to the pre-approval of some of his tweets.
In November 2021, Musk had started a controversial twitter poll that asked his followers whether he should sell 10% of his stake in Tesla. The move had caused Telsa’s stock to tank, inviting lawsuits from several shareholders. It is this poll that the SEC is currently investigating, the Associated Press reported.
Musk’s crypto tweets safe… for now
Musk has actively tweeted about crypto over the past two years. His tweet on dogecoin, in December 2020, had sent the memecoin soaring, and is largely credited with bringing Doge into the mainstream.
Musk’s recent tweet, that he won’t sell his crypto holdings, had also spurred a brief rally. His tweets on Bitcoin through 2021 had also prompted sharp market reactions, making him a closely watched figure in crypto.
Tesla holds over $1.5 billion in Bitcoin, beyond Musk’s personal holdings, which are unknown. The firm also accepts Doge as payment for some of its merchandise.
But while the SEC has so far not scrutinized the Tesla CEO’s crypto-related tweets, this could change as crypto is bought more under its regulatory fold. Given that Musk personally holds Bitcoin, Ethereum and Doge, the regulator could allege market manipulation.
Crypto regulation is also set to tighten in the United States, after President Joe Biden this month signed an executive order instructing several branches of the government, including the SEC, to focus on the space.
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