Judge Alison Nathan could kill Elon Musk’s settlement with SEC

Tesla CEO Elon
Musk.
Max Whittaker / Getty
Images

• A US federal judge has demanded Elon Musk and the
  Securities and Exchange Commission (SEC) justify their
  settlement over the Tesla privatisation fiasco.
• Judge Alison Nathan said the court needs to see
  justification that the settlement is “fair and
  reasonable.”
• Musk and the SEC have been given a week to submit a
  joint letter to explain why the deal should be
  cleared.

Elon Musk’s
settlement with the SEC is not finalised yet.

US District Court Judge Alison Nathan asked on Thursday that both
Musk and the SEC supply justification for the settlement reached
over the Tesla privatisation fiasco.

Musk did a deal
with the SEC on September 29, consisting of a $20 million
fine and a ban precluding him from acting as chairman of Tesla
for at least three years.

But Judge Nathan said the court needs to see evidence that the
deal is “fair and reasonable, with the additional requirement
that the public interest not be disserved,”
CNBC reports.

Judge Nathan asked that Musk and the SEC submit a joint letter
explaining why she should approve the settlement — and set a
one-week time limit.

A former federal prosecutor told CNBC that while the request is
unusual, it is not unheard of. “It’s odd given the nature of this
settlement. If there is a class action, it’s common. But just for
SEC enforcement action, particularly with a big fine, it’s
unusual,” Jay Hulings said.

On the same day, Musk
mocked the SEC on Twitter, calling it the “Shortseller
Enrichment Commission.”

Get the latest Tesla stock price here.