US SEC seeks court order to compel Elon Musk to testify about his Twitter acquisition

by -570 Views

New York

The US Securities and Exchange Commission on Thursday applied for a court order to force Elon Musk to testify in an ongoing probe related to his acquisition of Twitter and public disclosures he made in connection with the deal, according to court filings.

The filing Thursday in San Francisco federal court seeks a judge’s order requiring Musk to testify, alleging “blatant refusal to comply” with an earlier SEC subpoena.

X, the company formerly known as Twitter, did not immediately respond to a request for comment.

The SEC action is the latest turn in a long-running inquiry into whether Musk fully complied with his disclosure obligations when he began acquiring large amounts of Twitter stock, prior to his deal to buy the company. And it underscores years of friction between Musk and the agency over his public comments on numerous matters involving his companies.

Musk began buying up large amounts of Twitter stock in early 2022, and he revealed on April 4 of that year that he had become the company’s largest shareholder. Later that month, Musk inked a deal to buy the platform for $44 billion and — after a monthslong legal battle attempting to exit the deal — officially closed the acquisition in October of last year. Musk has faced a number of legal challenges related to his Twitter acquisition in the months since his takeover.

Musk testified twice as part of the SEC’s investigation in July 2022, according to the agency.

Starting that same month, Musk produced “hundreds of documents” to federal investigators working on the probe, “including documents Musk authored,” according to a declaration by an SEC attorney filed alongside the agency’s court request.

The SEC served Musk with a subpoena to testify again in the matter in May 2023, according to the court filing. The current subpoena at issue seeks evidence and testimony from Musk that the SEC does not yet possess, the agency said.

Despite previously agreeing to testify on September 15 and rescheduling the testimony once, Musk “abruptly notified the SEC” two days before his scheduled appearance to say he would not be showing up, the filing states.

The SEC attempted to negotiate with Musk to find alternative dates later this fall, according to court documents.

“These good faith efforts were met with Musk’s blanket refusal to appear for testimony,” it adds.

“The subpoena with which Musk failed to comply relates to an ongoing nonpublic investigation by the SEC,” the filing continued, “regarding whether, among other things, Musk violated various provisions of the federal securities laws in connection with (1) his 2022 purchases of Twitter, Inc (“Twitter”) stock, and (2) his 2022 statements and SEC filings relating to Twitter.”

When Musk informed the SEC he would not be appearing to testify, his lawyer, Alex Spiro, wrote to the agency on September 13, saying Musk had “already sat for testimony twice in this matter” and that “enough is enough.”

Spiro’s letter, which was included as an exhibit in the SEC’s court filings, accused regulators of seeking Musk’s testimony in bad faith and attempting to waste Musk’s time.

In addition, Spiro claimed that the recent release of Walter Isaacson’s biography of Musk would interfere because it contained “new information potentially relevant to this matter” that would take time for both sides to digest.


No More Posts Available.

No more pages to load.