From Musk to Truth Social: Critics say Biden's SEC targeted Trump's allies

On January 14, 2025, just six days before President Donald Trump was sworn in for his second, non-consecutive term, the Securities and Exchange Commission (SEC) filed a lawsuit against billionaire Elon Musk, who was entering the administration with Trump as head of the Department of Government Efficiency (DOGE).

The allegation? Musk violated securities laws when he purchased Twitter in 2022 because he allegedly filed paperwork about the purchase 11 days too late. The investigation into Musk’s purchase began almost as soon as he announced he was buying Twitter, now X, in 2022, which ended Democrats’ stranglehold on free speech on the platform. After the purchase, Musk’s other companies, SpaceX and Tesla, were also investigated by the Department of Justice and Federal Trade Commission. Musk himself warned this would happen after he announced he would no longer vote Democrat.

“Now, watch their dirty tricks campaign against me unfold,” he said in May 2022.

The SEC alleged that Musk failed to disclose his stake in Twitter when it surpassed 5% after he purchased stock in early 2022. He disclosed his stake once it reached 9% in April 2022, which the SEC argued allowed the billionaire to underpay for shares by $150 million. Musk eventually purchased Twitter for $44 billion and renamed it X.

Earlier this month, it was revealed that a federal judge approved a settlement between Musk and the SEC for $1.5 million, to be paid for by a trust attached to the X owner.

Truth Social: "This inexcusable obstruction"

Musk is not the only political figure to face an SEC investigation. Trump himself has faced the SEC recently – also under the Biden administration – when his Truth Social media platform began a merger with Digital World Acquisition Corp. (DWAC). When the merger was announced, the SEC began investigating, and a federal grand jury in New York issued subpoenas for DWAC’s board of directors, arguably causing the company’s stock price to drop. The merger was slow-walked, alleges Truth Social.

“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 a statement 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.”

Pattern of SEC hiring under former Clinton CFO raises questions

Republicans pointed to former SEC Chairman Gary Gensler’s hiring of former Democratic operatives to staff the agency, and his former work as CFO for Hillary Clinton’s 2016 campaign, where, according to congressional testimony, he had final approval authority for the campaign’s payments for the discredited Steele Dossier, as evidence the agency was biased against Republicans. Gensler is a former investment banker who served as the chair of the U.S. Securities and Exchange Commission from 2021 to 2025.

"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," then-Sen. J.D. Vance told Gensler at a Senate hearing in 2023.

"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 merger was eventually cleared by the SEC in February 2024, after members of DWAC were charged with insider trading and the company was fined $18 million for allegedly misleading investors. A year later, Trump’s media company merged with a fusion energy company.

Pursuing Trump but harming investors

In 2023, Rep. Dan Meuser, R-Pa., warned on John Solomon Reports that the SEC would be the next agency to be weaponized by the Biden administration, following the Department of Justice. Meuser argued that while Trump may have been the target for the SEC’s investigation (during the merger of Truth Social), it was the investors who were actually harmed.

“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.”

Laren Pisciotti, a single mom from New Jersey, says she has been unfairly targeted by the SEC after her name and the name of her venture capital firm, GlobalX VC LLC, were misused, forged, and weaponized by other people the SEC charged along with her for defrauding investors. Pisciotti told Just The News that the SEC knew she had been essentially the victim of identity theft before it charged her and her co-defendants, who have since settled.

She says the SEC’s investigation into her and her company ramped up after she hired Nicholas A. Gravante Jr., as her attorney. Gravante previously represented former Trump Organization CFO Allen Weisselberg, who pleaded guilty to tax fraud charges.

Pisciotti has been unsuccessful in her attempts to clear her name, and the records show she lost one of her attorneys due to an estimated $300,000 in unpaid legal fees. The SEC maintains that Pisciotti also controlled the Principal Pre-IPO Consulting Group LLC (Pisciotti disputes this). Principal is one of the co-defendants that settled in the case.

“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.”

In response to a Just The News inquiry about the aforementioned cases, an SEC spokesperson said, “We decline comment.”

More than political targeting alleged

The SEC has not been accused of only political targeting. In 2024, SEC member Hester Peirce wrote a dissent against the agency’s refusal to drop its 52-year practice of attaching gag orders to settlements. Peirce alleged the gag orders "sidestep[ped] First Amendment concerns" and ignored its "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 in her dissent. Then-SEC Chairman Gensler responded to Peirce’s dissent by saying that changing the rule 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 dealt with this rule after the SEC tried to enforce a “pre-approval” settlement condition against one of his tweets. Musk requested the U.S. Supreme Court look at his lawsuit against the SEC, saying the settlement conditions violates the “unconstitutional conditions doctrine.” 

Musk argued that the SEC claims the doctrine is “inapplicable” to its settlements, which Musk says would require "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.