Elon Musk Settles SEC Lawsuit For Spare Change, Proving Once Again That Rules Are For Other People
from the the-consequence-free-elite dept
There are perks to spending over a quarter of a billion dollars getting your preferred candidate elected. A multi-month free pass to take a sledgehammer to the federal government, for starters. And, apparently, a sweetheart deal when the SEC comes knocking with a lawsuit for which they had you dead to rights.
As you’ll recall, when Elon Musk first started buying up Twitter stock, before he officially decided to buy the whole company, he blew past the SEC-mandated deadline to reveal publicly that he had accumulated over 5% of the stock. Indeed, Musk waited until he held nearly 10% of the company’s stock before revealing his position at all. Many shareholders were rightly pissed off about this, because it likely diminished the value of their shares. There’s a reason the law says you need to disclose crossing that 5% line.
And, to be clear, this isn’t one of those gray areas of the law. This is a case where Elon pretty clearly violated the law in very obvious ways. But because the Biden admin was so terrified of looking even remotely biased against Elon, the SEC took nearly three years investigating the case (and yes, part of that was Elon trying to ignore investigatory demands) before finally suing him… in the last week of the Biden admin.
I’m somewhat amazed it took this long, but earlier this week, the Trump SEC announced a settlement. Despite the blatant flouting of the rules — which likely cost Twitter shareholders millions of dollars — the settlement requires Elon to pay $1.5 million. That’s basically pocket change to the world’s richest man. It’s not even a slap on the wrist, which might sting a bit.
And, of course, plenty of people are noticing what kind of signal this sends during one of the most corrupt US Presidential administrations in history:
“I do think that it suggests if you’re wealthy or powerful enough then there aren’t going to be consequences,” said Fagel, who previously led the SEC’s San Francisco office. “The optics of this are terrible.”
Perhaps in the grand scheme of things this doesn’t much matter. No real fine was going to matter much to Elon Musk. He has enough money to be shielded from effectively any monetary punishment — they could fine him 99% of his wealth and he’d still be richer than basically anyone reading this.
But it’s this kind of thing, and the lack of real consequences for it, that undermine our trust in institutions and the rule of law. The message being sent is hard to miss: if you’re wealthy enough and loyal enough to Trump, the rules simply don’t apply to you.
Filed Under: donald trump, elon musk, sec
Companies: twitter
Comments on “Elon Musk Settles SEC Lawsuit For Spare Change, Proving Once Again That Rules Are For Other People”
Fines are not punishment but deterrence
It does not matter what impact the fine makes on the personal situation of Musk. The purpose of the fine is to act as deterrent by turning the monetary advantage of illegitimate behavior into a net loss even after taxes.
If you wanted a punishment, it would involve jail time or social hours for Musk (the Middle Ages would have used the stocks for the sake of the stockholders). If you wanted a deterrence, the monetary amount would need to be much higher in order to more than offset the illicit gains.
This judgment is a fig leaf instead. It makes sure that Musk cannot actually be held to account for the same offense by any future administration.
Its purpose is not to serve justice, but to exhaust justice.
Re: reworded
deference
This is one reason why people say “billionaires shouldn’t exist”.
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There’s a segment of the population you can utterly destroy with a $200 speeding ticket too. The problem isn’t with people being rich, it’s with using money as a punishment.
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Making fines proportional to someone’s net worth would be one way of dealing with that specific issue. Someone only has a few hundred dollars in the bank? Five dollar fine. Someone has several billion dollars’ worth of assets? An eight-figure fine at minimum seems appropriate.
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I like the idea. But how do we account for irrevocable trusts and offshore trusts? If they are irrevocable, they are no longer included in the billionaire’s estate. But, I don’t know if judges in criminal cases can pierce them.
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Yes, surely if we eliminated fines then there would be no other ways in which rich people would have any unjust advantages over poor people.
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It’s not about eliminating all advantages to being wealthy. It’s about meting out punishment for misdeeds. Fines are an exceptionally, catastrophically terrible way to doing that.
OTOH, prison doesn’t care how rich you are. There’s a reason we don’t fine people for murder, because
murderers are usually poor people with no moneysociety actually wants to reduce the amount of murder going on. Prison isn’t a perfect answer to everything. There are real issues with the concept of mass incarceration and I’m not denying any of those, but if you want the bad behavior to actually stop then you need a consequence dire enough that potential violators will actually try to avoid it.Re: Re: Re:2
i take your point, aside from prison very much, in fact, caring how rich you are.
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… the deeper problem is letting un-elected SEC bureaucrats create laws, punishments, and their own courts to enforce them
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Maybe if monetary punishment actually scaled with income for private citizens, like it sometimes does with company fines, the rich wouldn’t be as eager to think they would get away with the crime.
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It does in some parts of the world:
“At the time, the [speeding] fine converted to just over $1 million. Swiss traffic laws use a formula that multiplies a daily income rate by the severity of the violation.”
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Or more specifically, Elon’s power must be dismembered and his credibility destroyed like the Committee of Union and Progress after WWI.
Wait, that’s fitting, considering Elon Musk is like James Nolan Mason with Musk’s support for neo-Nazis. Thanks for announcing to the world a year ago, Musk!
Videogames literally solved this already.
By having proportional systems for penalising fail states which scale off your character’s ability to pay the penalty.
We need our legal systems to keep pace.
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You’re just mad that the government demanded censorship didn’t continue.
Too bad. You are losing in every meaningful way.
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No, you’re mad the government isn’t censoring people like me.
I’ve literally said that people like you being censored is a bad thing. If I believed the Biden administration was censoring anyone, I would’ve said so and been pissed off about it, given that I voted him into office. But all the evidence I’ve seen says that Twitter flat-out ignored the “hey, this might be violating your TOS” notices from the government more than half the time and did so without penalty. I fail to see how that’s “coercive” action from the government. And since being punished by Twitter for violating its TOS is not a First Amendment violation, even if Twitter took action on those reports, there’s no rights violation unless there’s proof the government illegally coerced Twitter into taking action (and I haven’t seen such proof).
By the by, since you’re so pissed off about censorship, why not talk about censorship issues beyond “Biden tried to censor Twitter”—like, say, credit card companies and payment processors trying to censor adult content creators via debanking? Kickstarter announced a ban on adult-oriented projects today, and one of the criteria it listed as part of that ban is “projects created specifically for sexual gratification”. Do you know what that reads like to me? It reads like “right-wingers will use that as an excuse to target innocuous queer content under the belief that any queer content is only about sexual gratification”. So how concerned are you about that kind of censorship?
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What a weird response.
This story has nothing to do with “censorship” at all. It is entirely about a very clear situation in which there is a clear as day violation of the law. The law requires you disclose when you reach the 5% ownership line. No one denies that Elon ignored this law.
The efforts you contort yourself to kiss the ass of a guy who couldn’t care any less about you is embarrassing, dude. Have some self-respect.
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Ah, were your child rape videos and snuff clips getting censored! Poor you.
When you make your first billion dollars, chances are you’ve broken a law warranting capital punishment to do so that someone just hasn’t bothered to look for yet.
In general to make your first billion in USD or any other inflation adjusted currency equivalent, you most likely are guilty of murder or fraud at some point warranting the death penalty in most civilized nations.
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Most countries don’t have the death penalty and a few only have it for the most heinous war crimes.
However, the most populous nations India China, and the United States, along with other very populated nations such as Indonesia and Pakistan do have it.
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At the bare minimum, a billionaire is guilty of wage theft in some fashion.
I don’t believe in the death penalty for people. Corporations, on the other hand? Let’s start giving those the guillotine.
The investors he deceived by not announcing his stake are still suing him to recoup their lost profits.
has anyone heard of
The nations that Fine based on your wealth? Its a grat idea.
But for Elon, its IF’ the nation wants its Loan back, dont bother him.
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The Democrats and President Biden did whatever was best and necessary. Accusing them of somehow not magically making your wishes come true helps Trump. So shut up with that crap now.
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Wut?!?
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Just a right-wing NPC programmed with strawman caricatures of “leftists.”
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lmao wut