Elon Musk sued by SEC to force him to testify in X probe

By Al Mayadeen English
Source: Politico
6 Oct 2023 15:10

The SEC claims that Musk failed to show up to testify after being given a four-month notice, and after having agreed on a date for it, Musk canceled two days before, “raising, for the first time, several spurious objections."

X platform CEO and tech mogul Elon Musk. (AFP)

The Securities and Exchange Commission confirmed on Thursday that it has sued tech mogul Elon Musk to compel him to testify in the investigation regarding his 2022 purchase of X (Formerly Twitter).

In a US District Court for the Northern District of California filing, the investigation includes looking into the potential violations of security laws in the US concerning his $44 billion deal to purchase Twitter, in addition to his statements and SEC filings.

In a statement related to the matter, the SEC stated that the investigation is still ongoing, and they have not yet concluded if any laws were violated. This is after Musk and the SEC had a disagreement in the past regarding the purchase which was the main point of contention between them.

The SEC claims that Musk failed to show up to testify after being given a four-month notice, and after having agreed on a date for it, Musk canceled two days before, “raising, for the first time, several spurious objections."

Alex Spiro, an attorney representing Musk, sent in an email saying: “The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation - enough is enough.”

We go way back

In the order, the SEC stated that the X owner refused to answer questions about why the SEC needed him to testify again, alongside the location of the testimony and regarding a biography about him, which was released in September, that his lawyers needed time to review.

“None of Musk’s objections has any legal validity, and he has no justifiable excuse for his non-compliance with the SEC’s subpoena,” the SEC stated in the order.

The tensions go back to Musk's 2018 tweets referring to taking the electric car manufacturer Tesla private at $420 per share. The SEC filed and settled fraud charges against him, which ousted him as Tesla chair and gave him a $20 million penalty. Later in the year, Musk went on the “60 Minutes” television show and said he does “not respect the SEC.”

The SEC has repeatedly questioned Musk's comments about the Twitter acquisition. It first questioned him in April about whether his 9% Twitter stake was disclosed late and why it indicated that he intended to be a passive shareholder. Musk later amended his disclosure to reflect that he was an active investor.

Moreover, the SEC asked Musk in a letter in June last year whether he should have amended his public filing to reflect his intention to suspend or abandon the deal.