Stephen Diamond was quoted extensively in a Fortune article about Elon Musk’s brain-chip startup Neuralink, and how it may have misled regulators about Musk’s leadership role. In 2018, Musk had a settlement with the Securities and Exchange Commission (SEC) to settle charges that he misled Tesla investors about a possible deal to take the company private, and since then the SEC has twice accused Musk of violating the terms of the settlement with his tweets. Neuralink’s lawyer, Roel Campos, wrote to the SEC requesting a waiver from the the SEC that would enable Neuralink to continue to qualify for an exemption from having to register any private share sale with the SEC. In that request, he wrote that Musk “has no executive or management role at Neuralink.”

Stephen Diamond, a professor at Santa Clara University Law School who specializes in corporate governance and securities law, said that it appeared likely the SEC granted the Neuralink waiver based on more than just Campos’s statements about Musk’s authority at the company.

The SEC, Diamond said, would also have had to weigh the deterrent effect of making it harder for Musk’s other companies, such as Neuralink, to raise capital, against the extent to which it was unfair to essentially punish Neuralink’s employees and other investors for Musk’s misconduct at a different company. He said it was likely the rationale for granting the waiver might still be valid, even if Campos had not been fully forthcoming about exactly how much sway Musk exercised at Neuralink. He also said it was unlikely the SEC was unfamiliar with how much influence Musk had at Neuralink, even if he held no formal managerial title.