Elon Musk says US securities authority is ‘too close’ to Wall Street hedge funds

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Tesla Inc Chief Executive Elon Musk said on Tuesday the US Securities and Exchange Commission was an important watchdog for investors but questioned why it was not more proactive against the growth of listed blank-check companies.

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“They have an important role to play in protecting the public from getting swindled, but are sometimes too close to Wall St hedge funds imo (in my opinion),” Musk said on Twitter.

“Strange that they aren’t taking more action on some of the SPACs (special purpose acquisition companies),” he added.

Reuters reported earlier on Tuesday that the SEC is considering new guidance to rein in growth projections made by SPACs, or listed blank-check companies, including clarification of when they qualify for certain legal protections. That would extend an SEC crackdown on a deal frenzy in SPACs, which the regulator worries is putting investors at risk.

Musk has had his own run-ins with the SEC. He reached a settlement with the regulator after he tweeted in August 2018 that he had “funding secured” to potentially take Tesla private in a $72 billion transaction. In reality, Musk was not close to acquiring funding.

Musk and Tesla each paid $20 million in civil fines, and Tesla lawyers agreed to vet some of Musk’s tweets in advance.

Musk was sued by a shareholder last month who accused him of violating his 2018 settlement with the SEC. The case is ongoing.

Musk also tweeted earlier on Tuesday that he found the Federal Communications Commission, the National Highway Traffic Safety Administration and the Federal Aviation Administration to be “fair & sensible” and that he agreed with them “99.9 percent of the time”.

“On rare occasions, we disagree. This is almost always due to new technologies that past regulations didn’t anticipate”, he said.

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