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Judge doesn't like Elon Musk settlement with SEC, but says court can't block it
Ars Technica • • business
Key Points:
- A federal judge reluctantly approved a $1.5 million settlement between Elon Musk and the SEC over Musk’s failure to disclose a 9% Twitter stake within the required 10 days, despite raising significant concerns about the leniency of the deal.
- The judge criticized the settlement for allowing Musk to avoid admitting wrongdoing and for dropping the SEC’s request to recover $150 million in alleged unjust profits, leaving harmed Twitter investors uncompensated.
- The settlement uniquely places future violation prohibitions on a trust controlled by Musk rather than Musk personally, enabling him to publicly claim innocence, which the judge found unusual and troubling.
- Despite misgivings and red flags about the SEC’s handling and the fairness of the deal, the judge stated that the court must accept the settlement as it meets the minimum legal standards and the court cannot substitute its judgment for that of the parties.
- The judge emphasized that whether the SEC’s enforcement was adequate is a matter for the public to decide politically, not judicially, underscoring the limited role of courts in approving consent judgments.
