7-10-2023 (SAN FRANCISCO) The Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk in an effort to compel him to testify regarding his 2022 purchase of Twitter, now known as X, according to a statement released by the agency on Thursday.
The Wall Street regulator is conducting an investigation into potential violations of U.S. securities laws related to Musk’s $44 billion deal to acquire Twitter, as well as his statements and SEC filings concerning the company. The SEC made this disclosure in a filing submitted to the U.S. District Court for the Northern District of California.
It is important to note that the investigation is still ongoing and no conclusions have been reached regarding any breaches of the law, the SEC stated in a related press release.
Musk and the SEC have been involved in numerous disputes over the past decade, and the Twitter acquisition has become the latest point of contention between the two parties.
According to the SEC, Musk failed to appear for testimony last month, despite being given a four-month notice. The SEC claimed that they had agreed upon a specific date, but just two days prior, Musk cancelled, citing “several spurious objections” for the first time.
Alex Spiro, an attorney representing Musk, responded to the SEC’s claims in an email, stating, “The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation – enough is enough.”
The SEC, in the order, stated that Musk objected to questions regarding why his testimony was needed again, the location of the testimony, and the recent release of a biography about him in September that his legal team needed time to review.
“The agency wrote in the order that none of Musk’s objections hold any legal validity, and he does not have a justifiable excuse for failing to comply with the SEC’s subpoena.”
Tensions between Musk and the SEC can be traced back to 2018 when the Tesla CEO tweeted about taking the electric car manufacturer private at $420 per share. Subsequently, the SEC filed and settled fraud charges against Musk, resulting in his removal as Tesla’s chair and a $20 million penalty. Later that year, Musk publicly declared on the “60 Minutes” television show that he did “not respect the SEC.”
Although Musk recently lost a legal battle over the terms of the settlement, Spiro has expressed his intention to appeal to the Supreme Court.
