The Securities and Exchange Commission says 3,350 eligible claimants received payments from the fund created after its case against Elon Musk and Tesla, and has asked a federal judge to close it.
The US Securities and Exchange Commission said in a November 10 filing in Manhattan federal court that payments from the Fair Fund were complete. The claims administrator distributed $41.53 million, including interest and after fees, to 3,350 eligible claimants.
The fund came from civil penalties Elon Musk and Tesla paid to settle a 2018 SEC case over Musk’s posts about potentially taking the company private. The SEC has asked a judge to close the fund, CNA reported; the request has not been approved.
Recipients received 51.7% of their approved claims because their losses exceeded the fund’s size, the SEC said. Another 3,046 claims were rejected.
The SEC alleged securities fraud over Musk’s 7 August 2018 posts on Twitter saying he had “funding secured” to potentially take Tesla private. In a separate complaint against Tesla, the SEC alleged that the company failed to have controls for assessing whether Musk’s posts needed to be disclosed in its securities filings.
Musk and Tesla each paid a $20 million civil penalty without admitting wrongdoing. Musk also agreed to give up his role as chairman and let Tesla lawyers review some of his Twitter posts in advance.
The court created the fund from the $40 million in penalties on 26 February 2020 and appointed Rust Consulting to oversee its administration and distributions on 12 May 2021. The court approved the distribution plan on 25 March 2022 and authorized payments on 1 September 2023.
The plan based compensation on losses attributed to the defendants' conduct on Tesla common shares bought between 7 August 2018 at 12:48:16 EDT (20:48:16 Yerevan time) and 8 August 2018 at 16:00 EDT (9 August at 00:00 Yerevan time).
The higher excise is scheduled for 1 January 2027, while qualifying locally manufactured electric vehicles currently face 2%. The government says it wants to protect domestic production and encourage investment.
The SEC says approximately $449,000 remaining in the fund will go to the US Treasury. A federal judge must decide the request to close the fund; the SEC says its distributions are complete.
3 min
Arizona, Florida, Nebraska, Ohio and Wisconsin join Utah and California in a case alleging that the telehealth company mishandled health information and deceived customers about billing and cancellation.
2 min
The US state’s plan includes five container berths in Savannah and a fourth vehicle berth in Brunswick, which is 60% complete and scheduled to open in December 2027.
2 min
