After yesterday’s hearing, Sooknanan issued a short order telling attorneys for Musk and the SEC to submit a brief by June 1 “addressing the Court’s questions as stated on the record at today’s hearing.” Bloomberg’s report said Sooknanan told attorneys that the brief should explain “how the parties reached the deal, including why the proposed settlement involves a trust tied to Musk instead of the billionaire himself.”
SEC attorney Nicholas Grippo told the judge, “These are important, fair questions. Happy to answer them,” according to Bloomberg. The SEC historically operated with independence from the White House until Trump issued an executive order declaring that independent agencies must take orders from the president.
In a previous order last week, Sooknanan said that precedents require the court to consider whether “the settlement is fair, adequate, reasonable and appropriate under the particular facts,” “whether it resolves the claims in the complaint, and whether it was tainted by improper collusion or corruption.”
The SEC filed the lawsuit in January 2025 with only days remaining in the Biden presidency. In December 2024, SEC attorneys reportedly asked Musk to pay over $200 million to settle the allegations.
The disclosure rule that Musk was accused of violating is enforced under a “strict liability” standard, meaning that it doesn’t matter whether a rule violation was intentional or inadvertent. Musk unsuccessfully tried to get the lawsuit moved to a Texas court, and Sooknanan rejected his motion to dismiss the case in February 2026.
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