Note: This story was edited for clarity.
The Securities and Exchange Commission will not disqualify four of Elon Musk’s companies from securities registration requirements as a result of his run-in with securities fraud law.
In a series of “no action” letters on Tuesday, the SEC said it will allow Musk’s companies to offer securities without registering them with the SEC. The exemption was granted under the SEC’s “Regulation D,” which still mandates that exempt companies file a “Form D” document alongside any offering. The document requires information about the company’s executives and some details about the offering, but little other information about the company.
In late September, lawyers from The Boring Company, SpaceX, Neuralink and Tesla all applied for a “waiver of disqualification,” which would relieve the companies of being denied the exemption due to Musk’s settlement with the SEC. All four companies argued that the alleged misconduct did not involve the offer and sale of securities, adding that the conduct in question was done by Musk himself and not by the companies.
The four companies also warned that not granting relief to the companies would cause harm.
“Tesla has issued hundreds of millions of dollars of securities under Regulation D and likely will consider relying on Regulation D for further issuances of securities in the future,” Tesla wrote to the SEC in a letter dated Sept. 28.
The SEC told all four companies they would get the exemptions as long as Musk complies with the terms of the settlement. Under that settlement, Musk is required to step down as Tesla’s chairman and will pay a $20 million penalty.
“Any different facts from those represented or Musk’s failure to comply with the terms of the Musk Judgement would require us to revisit our determination that good cause has been shown and could constitute grounds to revoke or further condition the waiver,” the SEC wrote.
Brian Cheung is a reporter covering the banking industry and the intersection of finance and policy for Yahoo Finance. You can follow him @bcheungz.