Investors ignored news of greater scrutiny from the Securities and Exchange Commission (SEC) surrounding Elon Musk's purchase of Twitter shares before his 2022 acquisition of the platform, with Tesla (TSLA, Financial) shares reaching new record highs on Friday. Since the U.S. Presidential election on November 5, Tesla stock has skyrocketed over 70% and increased almost 135% over the past six months.
According to reports, the SEC is expecting Musk to pay a penalty over claimed violations of his disclosure—or lack thereof—of Twitter stock transactions before the $44 billion merger. In a letter posted on X, Musk's attorney, Alex Spiro, referred to the demand as a "misguided scheme" and attacked the commission for restarting a separate inquiry into Neuralink, Musk's brain-machine interface startup.
Maintaining its policy of secrecy about investigations, the SEC has not responded to the letter or confirmed the demands. According to Spiro's letter, federal law requires Musk to reveal his ownership in Twitter once it rises above 5%, but he did not do so. Musk apparently delayed openness for investors until his holding peaked at 9%, instead.
Notwithstanding the debate, Tesla's stock surge highlights investor faith in the company's long-term future even as Musk deals with continuous regulatory obstacles.
