Republican lawmakers, business figures and former targets say the Securities and Exchange Commission under Gary Gensler pursued politically connected cases that damaged investors, restricted speech and raised questions about partisan enforcement.
By yourNEWS Media Newsroom
WASHINGTON — Critics of the Securities and Exchange Commission say a series of investigations and enforcement actions under the Biden administration formed a pattern of pressure against President Donald Trump, Elon Musk and others connected to Trump’s political movement.
The scrutiny intensified in the final days of the Biden presidency, when the SEC filed a lawsuit against Musk on Jan. 14, 2025, six days before Trump returned to office for a second, nonconsecutive term. Musk was preparing to join the incoming administration as head of the Department of Government Efficiency.
The commission alleged that Musk violated federal securities law during his acquisition of Twitter, now known as X, by submitting required disclosure documents 11 days late.
The SEC began investigating Musk’s purchase shortly after he announced his intention to acquire Twitter in 2022. The transaction later changed the platform’s approach to speech and content moderation, ending what critics described as Democratic control over political discussion on the site.
After Musk completed the acquisition, federal scrutiny also extended to his other companies. SpaceX and Tesla faced investigations from the Justice Department and the Federal Trade Commission.
Musk had publicly predicted that federal and political pressure would follow his decision to stop supporting Democrats.
“Now, watch their dirty tricks campaign against me unfold,” Musk wrote in May 2022.
The SEC’s case centered on Musk’s purchase of Twitter shares in early 2022. Federal law required him to disclose his ownership after his stake exceeded 5 percent, but he did not report the position until it reached 9 percent in April.
The commission alleged that the delayed disclosure allowed Musk to buy additional shares at lower prices and underpay other investors by approximately $150 million.
Musk ultimately purchased Twitter for $44 billion and renamed the company X.
A federal judge earlier this month approved a $1.5 million settlement between Musk and the SEC. The payment is to be made through a trust associated with the X owner.
The Musk case was one of several actions cited by Republicans and other critics who accused the SEC of targeting figures aligned with Trump.
According to Just the News, Trump’s social media company also faced an extended SEC review during its planned merger with Digital World Acquisition Corp.
The commission opened an investigation after the merger between Trump Media & Technology Group, the parent company of Truth Social, and DWAC was announced. A federal grand jury in New York later issued subpoenas to members of DWAC’s board.
The investigation and subpoenas were cited as factors that contributed to a decline in the company’s stock price.
Truth Social accused the SEC of deliberately delaying the merger process.
“The SEC has stalled its review of our planned merger with DWAC, having failed to act despite DWAC having filed its registration statement more than four months ago,” the company said in September 2022.
“This inexcusable obstruction, which directly contradicts the SEC’s stated mission, is damaging investors and many others who are simply following the rules and trying to expand a successful business. In light of the obvious conflicts of interest among SEC officials and clear indications of political bias, TMTG is now exploring legal action against the SEC. Despite the increasing weaponization and politicization of government agencies, Truth Social will continue its expansion plans, supported by the unprecedented levels of user engagement on the platform.”
Republicans also questioned personnel decisions made by then-SEC Chairman Gary Gensler, accusing him of staffing an ostensibly independent regulatory agency with former Democratic operatives.
Gensler, a former investment banker, led the commission from 2021 through 2025. Before that, he served as chief financial officer for Hillary Clinton’s 2016 presidential campaign.
Congressional testimony indicated that Gensler had final approval authority over campaign payments connected to the discredited Steele dossier.
Then-Sen. J.D. Vance confronted Gensler about the agency’s personnel and enforcement record during a 2023 Senate hearing.
“You seem to have a very troubling pattern of hiring, at an impartial regulatory agency, a lot of people who seem to have a vendetta against the former president, and I fear, and I worry that that has implicated itself and affected the policy of the SEC,” Vance told Gensler.
“You can make a pretty good argument that the SEC was using its enforcement powers to silence the chief political rival of the current president,” Vance added. “It looks more and more like not an impartial regulatory body protecting investors and consumers but a regulatory body that is using its power to silence political rivals of the current President of the United States.”
The commission ultimately approved the DWAC merger in February 2024.
Before that approval, some DWAC members were charged with insider trading, and the company was fined $18 million over allegations that it misled investors.
One year after the SEC cleared the transaction, Trump’s media company merged with a fusion energy company.
Rep. Dan Meuser, R-Pa., had warned in 2023 that the SEC could become the next federal agency weaponized by the Biden administration after the Justice Department.
During an appearance on “John Solomon Reports”, Meuser argued that ordinary shareholders, rather than Trump personally, bore the financial consequences of the commission’s handling of the Truth Social transaction.
“They’re not harming President Trump. President Trump is a very, very wealthy man. The value of Truth Social is not going anywhere, right?” Meuser said. “Only those […] individual investors could be harmed because of the SEC’s treatment of this. And that’s really awful.”
Other individuals have accused the SEC of unfair or politically influenced enforcement unrelated to Trump’s companies.
Laren Pisciotti, a New Jersey single mother and founder of the venture capital firm GlobalX VC LLC, said her name and business identity were forged, misused and weaponized by other people accused of defrauding investors.
The SEC nevertheless charged Pisciotti alongside the other defendants.
Pisciotti told Just the News that the agency knew before filing charges that she was effectively a victim of identity theft. Her co-defendants have since settled with the commission.
She said the investigation became more aggressive after she hired attorney Nicholas A. Gravante Jr., who had previously represented former Trump Organization Chief Financial Officer Allen Weisselberg.
Weisselberg pleaded guilty to tax fraud charges.
Pisciotti has continued trying to clear her name but has not succeeded. Records show that one of her attorneys withdrew after she accumulated an estimated $300,000 in unpaid legal bills.
The commission contends that Pisciotti controlled Principal Pre-IPO Consulting Group LLC, another defendant that settled the case. Pisciotti disputes that allegation.
“They’re ignoring the facts. Ignoring all the forgeries, all the altered documents that I showed them, all the documents that affect investors,” Pisciotti told Just the News. “Pretty much, the SEC is aware of a crime, and they’ve done nothing about it.”
Asked about the Musk, Truth Social and Pisciotti cases, an SEC spokesperson responded, “We decline comment.”
Concerns about the agency’s enforcement policies have extended beyond allegations of partisan targeting.
In 2024, SEC Commissioner Hester Peirce dissented from the commission’s refusal to abandon a 52-year-old practice requiring defendants who settle cases to agree not to publicly deny the commission’s allegations.
Peirce said those gag provisions “sidestep[ped] First Amendment concerns” and exploited the commission’s “superior bargaining power.”
“Why should the public put much weight on allegations so flimsy that they need the protection of a contractual obligation not to deny them?” Peirce wrote.
Gensler defended the policy, arguing that removing the condition would “alter the impact of enforcement settlements if defendants could deny any wrongdoing in the court of public opinion and dismiss sanctions as the cost of doing business without the Commission being able to revive its ability to have its day in court.”
Musk encountered a related dispute after the SEC attempted to enforce a settlement provision requiring advance approval of certain public statements, including a tweet.
He asked the Supreme Court to review his challenge to the SEC, arguing that the restriction violated the “unconstitutional conditions doctrine.”
According to Musk, the SEC maintained that the doctrine was “inapplicable” to commission settlements. He argued that such a position could permit the government to demand “a waiver of any constitutional right—e.g., to criticize the government, to practice a religion, or to obtain a jury trial in any future action—without any judicial scrutiny.”
The Supreme Court declined to hear the case.
Original article
Comments