Elon Musk Receives Settlement Request from SEC Regarding Twitter Stock Transactions

Tesla CEO Elon Musk publicly announced a "settlement request" from the Securities and Exchange Commission (SEC) regarding his transactions involving Twitter shares. On Thursday, Musk shared a letter from his attorney Alex Spiro of Quinn Emanuel to SEC Chairman Gary Gensler via social media. The letter summarized the SEC's ultimatum, indicating that Musk must accept a settlement that includes a penalty payment within 48 hours or face multiple charges related to his transactions and disclosures concerning Twitter shares.

The SEC's investigation focuses on whether Musk or his associates were involved in securities fraud during the period in 2022 when Musk sold Tesla shares and increased his ownership in Twitter. This scrutiny coincides with the timeframe leading up to Musk's high-profile leveraged acquisition of the social media platform, now called "X."

Musk's social media post included a personal remark directed at Gensler: "Oh Gary, how could you do this to me?" This comment was shared alongside an emotional emoji and his attorney's letter. In another post, Musk shared an AI-generated image depicting Gensler as a snail, describing it as "very flattering."

Contrary to what the letter implied, a source wishing to remain anonymous due to the sensitivity of the information told CNBC that Musk was given more than 48 hours to respond to the SEC's settlement offer. The source also noted that failing to reach a settlement does not necessarily mean that charges would be the inevitable next step. Instead, the SEC may issue a Wells Notice that precedes recommendations to agency commissions, which would then decide whether to move forward with charges.

As of Thursday, neither Gensler, Musk, nor Spiro had responded to requests for comments on the matter.