Musk funding secured: SEC moves to close Tesla fund

The US Securities and Exchange Commission has asked a federal judge in Manhattan to close the Tesla Fair Fund, the pool of money created from fines over Elon Musk‘s 2018 “funding secured” post, after finishing payouts to investors. The Musk funding secured case began on 7 August 2018 and the SEC said on Tuesday, 10 November 2026, that distribution of the fund is now complete, Reuters reported.

What happened

According to the Reuters report by Jonathan Stempel, the SEC told the court that a claims administrator had paid out $41.53 million, which includes interest and is counted after fees, to 3,350 eligible claimants. The SEC said: “Distribution of the Fair Fund is now complete.” Investors received 51.7% of their approved claims because their losses were larger than the money available. Reuters said 3,046 claims were rejected, and about $449,000 left in the fund will go to the US Treasury.

The fund came from the settlement of the SEC’s first civil case against Musk. The regulator announced the settlement on 29 September 2018. In that announcement the SEC alleged that Musk committed securities fraud with a 7 August 2018 post saying he had “funding secured” to take Tesla private at $420 a share, that funding was not secured, and that he had not discussed deal terms with financing partners. The SEC also alleged that Tesla lacked disclosure controls over his posts. Musk and Tesla settled without admitting or denying the allegations.

Key numbers

$20 million: the civil fine each paid by Musk and by Tesla, $40 million in total, according to the SEC’s 2018 announcement.
$41.53 million: paid to investors including interest and after fees, per Reuters.
3,350 claimants were paid, while 3,046 claims were rejected, per Reuters.
51.7%: the share of approved claims that investors received, per Reuters.
$449,000: the approximate leftover amount that goes to the US Treasury, per Reuters.

Who is Elon Musk and why the funding secured case still matters

Musk is the chief executive of Tesla and the founder of SpaceX, and Reuters notes that he later folded X, the former Twitter, into SpaceX. Tesla sits in the automotive and EV industry, where the 2018 episode remains a reference point for how a founder’s social media posts can move a listed stock. Reuters said Tesla shares and trading volume spiked after the post and that the stock closed more than 6% higher than when he began posting, before it fell once it was clear financing had not been lined up.

The 2018 settlement also changed Tesla’s governance. The SEC said Musk had to leave the chairman role and could not be re-elected chairman for three years, and that Tesla would add two independent directors and a committee of independent directors to oversee his communications.

A separate investor trial went Musk’s way. InsideEVs reported in February 2023 that a jury unanimously agreed Musk did not intend to mislead investors and was not liable for their losses, and that Musk has maintained the funding was secured. Shareholder suits against billionaire founders remain active elsewhere, as in the Nvidia shareholder lawsuit against Jensen Huang.

What it means for Musk

Reuters said the SEC’s request does not touch a later case over Musk’s late disclosure of his early Twitter share purchases in 2022. That matter was settled with a $1.5 million payment from a trust in his name, without an admission of wrongdoing. A federal judge approved the settlement in July while expressing “significant misgivings” about whether the SEC had let Musk off too easily, Reuters said. Reuters did not include any statement from Musk or Tesla on the fund’s closure.

What happens next

Closing the Musk funding secured fund now depends on the Manhattan judge approving the SEC’s filing. Reuters did not report a ruling or a hearing date. Once the court signs off, the fund’s accounts are shut and the remaining roughly $449,000 goes to the Treasury, ending the money side of the 2018 case.