Federal judge Judge Sooknanan has ordered Elon Musk and the SEC to file a briefing by June 1 explaining how their proposed settlement was structured. The court’s directive follows a hearing in which the judge asked why the deal places the payment into a trust tied to Musk as part of the settlement rather than a direct personal payment, and any conflict concerns. Both sides indicated they will comply.

Brooklyn’s Southern District previously ruled that settlements must be “fair, adequate, reasonable and appropriate” under the facts, and must not be tainted by collusion or corruption. The SEC’s lawsuit, filed in January 2025 during the final days of the Biden administration, alleges Musk violated a strict‑liability disclosure rule. Reports say the agency initially sought $200 million from the billionaire.

Musk tried to shift the case to Texas, arguing venue would be more favorable, but Sooknanan denied the motion in February 2026. The outcome will determine whether the trust arrangement stands or if a direct payment is required, a decision that could set precedent for how the SEC handles high‑profile enforcement actions involving political pressure, with future regulatory implications.