SEC Acting Head Refrained from Voting to Sue Elon Musk, Unlike Other Commissioners
Ahead of the Trump administration’s entry into the White House in January, the U.S. Securities and Exchange Commission (SEC) conducted a vote in which a majority of the commissioners decided to pursue legal action against Elon Musk for securities law violations related to his Twitter acquisition. Reports indicate that three Democrat commissioners and a lone Republican voted in favor of suing Musk, while the acting head of the agency, Mark Uyeda, dissented from the decision.
The allegations against Musk revolve around his failure to disclose his acquisition of more than 5% of Twitter shares within the mandated 10-day period. It is claimed that this delayed disclosure allowed Musk to underpay for the shares by at least $150 million. Subsequently, once his ownership became public knowledge, Twitter’s stock price surged by 27%. The SEC has been investigating Musk’s actions concerning Twitter since 2022, culminating in a vote on January 14, 2025, to determine the legal course of action.
During the commissioner’s vote, Republican Hester Peirce raised concerns about the proposed fine amount but ultimately supported the lawsuit. However, Uyeda chose a different path, pushing SEC staff to declare that the case against Musk was devoid of political motives. Unusual for the SEC to make such declarations, this tactic was met with skepticism from staff members who declined to endorse it. Seemingly isolated in his action, Uyeda cast the lone dissenting vote, resulting in a 4-1 majority in favor of suing Musk.
Subsequently, Uyeda’s dissenting stance saw him elevated to the position of acting head of the SEC, amid ongoing legal actions against Musk. The Tesla CEO recently received a court summons related to the case and must respond by early April. With Uyeda at the helm and a broader political landscape deflected in Musk’s favor, the tide seems to be turning in Musk’s favor. Trump’s executive order discrediting investigations from the previous administration, combined with regulatory changes and agency alterations, appears to be shaping a favorable landscape for Musk.
In light of these developments, the SEC’s pursuit of action against Musk continues, propelled by a changing political and regulatory environment that could impact the final outcome of the affair. Musk seems to enjoy a heightened position of influence and protection, raising questions about the objectivity and integrity of the legal processes undertaken by regulatory bodies in cases of alleged securities law violations.
