The US Securities and Exchange Commission applied for a court order on Thursday, seeking to compel Elon Musk to testify over his purchases of Twitter stocks.
The testimony is part of an ongoing probe into his acquisition of the company, as well as his public disclosures regarding the deal.
The court order request, which was filed in a San Francisco federal court, accuses Musk of “blatant refusal to comply” with a previous SEC subpoena.
Musk is currently under investigation by the federal agency for the alleged violation of securities laws when he acquired Twitter, which he later renamed to X.
Why Is Musk Under SEC Lens?
The court order request by the Securities and Exchange Commission is the latest turn of events in the agency’s protracted inquiry into Musk’s compliance with his disclosure obligations during his acquisition of Twitter.
Musk had begun purchasing large amounts of Twitter stocks early in 2022. On April 4th, he revealed that he had become the largest shareholder of Twitter.
He went on to sign a deal to acquire the microblogging platform for $44 billion later the same month. Twitter initially resisted the move, but Musk ultimately closed the acquisition after a legal battle that drew on for months.
He has since faced several legal challenges connected to the acquisition, including the investigation by the SEC.
In a letter Spiro wrote to the SEC, Spiro accuses regulators of trying to waste Musk’s time and seeking testimony in bad faith.
The SEC probe was initiated in 2022, soon after Musk’s Twitter takeover. According to a declaration filed by an SEC attorney alongside the court order request, Musk provided federal investigators working on the probe with “hundreds of documents,” including documents authored by him.
The regulatory body served him with a subpoena, summoning him to testify again in May 2023. According to the agency, the SEC seeks to obtain new evidence and testimony from Musk through the subpoena.
Musk had previously agreed to show up and testify on September 15 after rescheduling it once. However, according to the court filing, Musk “abruptly notified the SEC” just two days before the scheduled testimony that he would not be appearing for the testimony.
The agency’s attempts to negotiate with Musk and set alternative dates for the testimony later this fall failed to bear any fruit. “These good faith efforts were met with Musk’s blanket refusal to appear for testimony”, the court filing added.
The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation – enough is enough.Alex Spiro, Musk’s lawyer
Musk’s Long-Running Friction With the SEC
This is far from Musk’s first tussle with the SEC – the two have been at each other for a long time now. In 2018, Musk tweeted that he had “funding secured” to take Tesla private for $420 per share, adding that investor support was secure too.
This resulted in a fluctuation of Tesla’s share prices, triggering an SEC investigation to determine if he had committed securities fraud.
In February this year, the US regulator ordered Musk to have a lawyer review and approve his tweets related to Tesla. Musk and Tesla are also under SEC investigation over their claims of the “full self-driving” capabilities of Tesla vehicles.
…. to be continued
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