The top enforcement official of the Securities and Exchange Commission, Margaret Ryan, quit last Monday after just six months on the job. Reuters now says the reason for her departure is due to tension between Ryan and top SEC officials over enforcement cases against financial backers of Donald Trump, including Tesla CEO Elon Musk.
Ryan joined the SEC just six months ago, and had not had previous experience in securities law. She was previously a US marine, a military judge, and a clerk for Clarence Thomas.
Her departure on Monday was a surprise, given so little time on the job. But Reuters’ new report puts some light on the matter.
According to people familiar with the matter, Ryan clashed with others in the department over enforcement against against both Musk, who gave $288 million in bribes to Mr. Trump’s presidential campaign (an office he is Constitutionally barred from holding), and Justin Sun, a crypto billionaire who bought into one of Mr. Trump’s crypto scams.
The SEC has been investigating both of these individuals for fraud, though Sun’s case was settled this month and many charges were dismissed.
The SEC’s investigation of Musk traces back to his acquisition of Twitter in 2022. The case alleges that Musk waited too long to disclose his stake in Twitter, which allowed him to purchase shares at artificially low prices.
That case, too, might be on the road to settlement – Musk’s lawyer said on March 4 that they are talking to “officials above the SEC staff” in an attempt to settle, indicating that the White House itself is interested in this case against its largest source of political bribes.
Reuters points out that settlements are common, but that securities lawyers thought the SEC had particularly strong cases against both Musk and Sun if these cases were to go to court instead of settling.
Separately, a jury found late last week that Musk misled investors during his Twitter purchase. That is a class action lawsuit, not an SEC enforcement action, but adds credence to the idea that the case is strong against him.
While Ryan did not state the reason for her departure, the departure comes just weeks after disclosure of the Sun settlement and after court filings showing the SEC is in settlement talks with Musk. With Reuters’ report confirming the tension between Ryan and others in the SEC over their light treatment of Musk, it seems possible that he might be getting off easier than he should, after the $288 million in bribes he gave.
Electrek’s Take
There’s a reason I use the word bribe when it comes to political “contributions,” and this is it. Both of these individuals have given large sums of money to a man known for his corruption and disrespect for the law, and both of them seem like they will be rewarded for it.
And giving money to someone who has control over enforcement actions, with the expectation that that action will result in lighter punishment against you, is a bribe.
Musk’s case is particularly jarring. The company that is source of most of his wealth, Tesla, has been materially harmed by Musk’s bribes, losing $1.4 billion in revenue in only a single quarter as a result of the $288 million he gave.
So he was clearly not even looking for something that would benefit his companies financially. In fact, everyone in their right mind went clear-eyed into this, knowing that these bribes would harm his company financially, along with all its employees and investors. And yet he still gave them.
Why? Was he too dumb to know that the campaign was heavily anti-EV? Or did he know that and ignore it, instead accounting only for his own personal benefit and not for that of his company? (Or alternately, was it just a matter of solidarity for someone he appears in the Epstein Files alongside?)
With this new evidence of clashes within the SEC over enforcement of the law, we have more indication that this money may have led to the legal benefit that many theorized could have been the point of the bribes all along.
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