By Mike Spector, Rachael Levy, Marisa Taylor and Chris Prentice
NEW YORK/WASHINGTON (Reuters) – Final month, within the remaining days of the Biden administration, the SEC set a decent deadline of a number of days to require Elon Musk to pay a settlement or face civil lawsuits associated to alleged securities violations throughout his $44 billion tenure. takeover of Twitter in 2022.
Musk introduced the information himself in a publish on social media: “Oh Gary, how might you do that to me? he wrote, referring to SEC Chairman Gary Gensler.
He added a smiley face emoji, however hooked up a authorized letter condemning the “ill-reasoned” ultimatum: “We demand to know who directed these actions, whether or not it was you or the White Home. »
An SEC spokesperson declined to touch upon the incident. The White Home didn’t reply to a request for remark.
The SEC will not be the one investigative company that Musk has challenged and accused of political harassment. The billionaire has lengthy denounced authorities surveillance, portraying himself as a sufferer of bureaucratic fanatics who stifle doubtlessly life-saving improvements at his corporations.
The White Home will quickly be occupied by Donald Trump — whom Musk spent greater than 1 / 4 of a billion {dollars} to assist elect — quite than Joe Biden, who nominated Gensler. Trump has already named a brand new SEC chairman to interchange Gensler, who plans to resign upon Trump’s inauguration.
Musk’s potential to have extraordinary affect with the brand new administration raises questions in regards to the destiny of federal investigations and regulatory actions affecting his enterprise empire, no less than 20 of that are underway, based on three sources acquainted with SpaceX’s operations and Tesla (NASDAQ:) and the businesses’ interplay with the U.S. authorities, in addition to 5 present and former officers who’ve direct data of particular person investigations into Musk’s corporations.
Investigations embody evaluations of alleged securities violations; questions in regards to the security of Tesla’s Autopilot and Totally Self-Driving (FSD) programs; potential animal welfare violations in Neuralink mind chip experiments; and alleged issues with air pollution, hiring discrimination and licensing at SpaceX.
Musk, Tesla, SpaceX and Neuralink didn’t reply to requests for remark. Earlier than the election, Musk posted: “I by no means requested [Trump] for no favors, and he provided me none.
A Trump transition spokesperson known as Musk a “sensible” entrepreneur and mentioned the Trump administration would guarantee legislation and order, “treating all People equally.”
Musk-related instances might stall or be deserted by Trump-appointed company and division heads, present and former U.S. officers mentioned.
Trump’s DOJ picks, for instance, embody legal professionals who defended him in legal and impeachment trials, in addition to a nominee for FBI chief whom Musk vocally supported and who repeatedly vowed to going after Trump’s enemies, one present and three former DOJ officers mentioned.
Decrease-level Justice Division officers additionally might train prosecutorial discretion to keep away from aggressively pursuing Musk corporations in gentle of his relationship with Trump, mentioned Barbara McQuade, a former U.S. lawyer in Detroit below the Obama administration who additionally labored as a federal prosecutor throughout the George W. Bush and Clinton administrations. “To the extent that they need to please the boss, I believe they know the way to do it.”
Some authorized specialists have downplayed the chance of political interference from Musk, mentioning that lack of progress in an investigation might point out inadequate proof.
It is also potential that prosecutors who imagine they’ve sturdy instances will transfer ahead no matter Musk’s position, authorized specialists mentioned.
“I do not assume there’s that a lot threat of Musk going undercover to affect enterprise,” mentioned Robert Frenchman, a white-collar protection lawyer at Dynamis in New York. “Most prosecutors file instances they assume they’ll win.”
Representatives from the DOJ and any departments and companies with ongoing investigations into Musk or his corporations haven’t commented on the investigations or their capability to implement rules in opposition to Trump’s allies throughout his second time period. The EPA and the Nationwide Freeway Site visitors Security Administration (NHTSA) mentioned they may proceed to fulfill their authorized and regulatory obligations.
‘FIRST Buddy’
Because the election, Musk has known as himself Trump’s “first buddy,” frequented Trump’s Florida membership at Mar-a-Lago, shared Thanksgiving with the president-elect’s household and publicly weighed in on his nominations for the presidency. cupboard.
Trump nominated Musk to co-lead a brand new “Division of Authorities Effectiveness,” a personal entity advising on reducing budgets and rules. It stays unclear what authority this position will confer.
Musk touted his newfound affect and gave particular examples of how he might use it. Earlier than the election, Musk mentioned he would search to make use of his place as effectivity czar to advance nationwide rules on driverless autos that may nearly actually profit Tesla and get rid of “irrational” guidelines such because the one resulting in a superb for air pollution in opposition to SpaceX.
NHTSA officers have scrutinized Tesla repeatedly for practically a decade, typically angering Musk. In a 2016 name, he shouted abuse at regulators who launched the primary of a number of investigations into Tesla’s Autopilot driver help system after a deadly crash, based on two individuals acquainted with the matter. There are at present 5 ongoing and open NHTSA investigations masking driver help expertise and different operations in Tesla autos.
Tesla blamed Tesla drivers for defending itself in opposition to lawsuits and investigations into accidents involving FSD and Autopilot, saying it warned drivers to watch out.
A DOJ investigation into whether or not Tesla and Musk exaggerated the self-driving capabilities of their autos is amongst these the place investigators have confronted challenges. Prosecutors have struggled to show that Musk and Tesla crossed a line between authorized gross sales and knowingly false statements that misled buyers and harmed customers. The investigation stalled earlier than the election, partially due to authorized obstacles, an individual acquainted with the matter mentioned.
One other investigation, led by the U.S. lawyer’s workplace in Manhattan, issues the autonomy of Tesla autos and follows a Reuters investigation that discovered the automaker rigged its dashboard screens to present drivers projections “optimistic” in regards to the variety of kilometers they might journey on the battery. energy. It’s unclear how far the investigation has progressed.
“To our data, no authorities company, in any ongoing investigation, has concluded that any wrongdoing existed,” Tesla mentioned in a quarterly submitting with the SEC.
Reuters was the primary to report that some Trump auto coverage advisers have really useful eradicating the requirement for automakers to report crash knowledge involving automated driving programs, a transfer that would cripple the flexibility to NHTSA to research and regulate the security of rising expertise.
ROCKETS AND NASA
SpaceX already faces little regulatory scrutiny as a result of the federal government has outsourced a lot of its house missions to Musk’s rocket and satellite tv for pc firm, based on two former SpaceX officers and a present authorities official acquainted with the corporate’s interactions with NASA, EPA and Federal Aviation. Administration (FAA).
At a summit in September, Musk known as an EPA investigation “loopy” that led SpaceX to comply with a proposed $148,378 superb for dumping pollution, which Musk mentioned was really “consuming water”.
The FAA individually proposed in September to superb SpaceX $633,000 for allegedly failing to observe licensing necessities and failing to acquire approval for modifications throughout two 2023 launches.
Musk known as on FAA chief Mike Whitaker to resign in September, shortly after the FAA fined SpaceX and delayed one in all its launches. Whitaker mentioned final month he would resign earlier than Trump’s time period in workplace.
The Wall Road Journal reported in October that Musk was in common contact with Russian President Vladimir Putin. Three sources acquainted with SpaceX’s authorities interactions mentioned any scrutiny of Musk’s contacts with a U.S. adversary can be unlikely below Trump, who selected tech billionaire Jared Isaacman to guide NASA. Isaacman funded and joined two personal house missions involving SpaceX.
NASA declined to remark, and Isaacman and a media consultant for Isaacman’s firm didn’t reply to a request for remark.
Musk didn’t reply to requests for remark relating to his reported contacts with Putin. In a single occasion, he responded with two laughing and crying emojis to a social media publish about X suggesting that Musk’s critics had been attempting to painting him as a Russian agent.
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