SEC Files Suit To Compel Elon Musk To Testify In Twitter Investigation

The U.S. Securities and Exchange Commission has filed a lawsuit against Elon Musk, who heads Tesla, SpaceX and X Corp., seeking to force him to testify over his last year’s Twitter acquisition.

In a filing in California federal court, the US securities regulator said it was conducting an ongoing non-public investigation into whether Musk had violated various provisions of the federal securities laws in connection with his purchases of Twitter stock. It is also probing his 2022 statements and SEC filings relating to Twitter.

A hearing on the filing is scheduled to take place on November 9.

The SEC in the lawsuit alleged that Musk failed to appear for testimony on September 15, 2023, as required by its subpoena served to Musk in May 2023.

The SEC attorneys wrote, “Musk’s ongoing refusal to comply with the SEC’s administrative subpoena is hindering and delaying the SEC staff’s investigation to determine whether violations of the federal securities laws have occurred. Accordingly, the SEC now asks the Court to compel Musk to appear for investigative testimony.”

The agency said it tried to find an agreeable time and place to meet with Musk, and multiple dates were proposed for October and November of this year. But, “these good faith efforts were met with Musk’s blanket refusal to appear for testimony,” the filing showed.

Musk, who acquired Twitter in around $44 billion deal in late October last year, recently changed its name to X. Prior to the acquisition, Musk purchased a 9.2 percent stake in Twitter in a series of share purchases, which was above the 5 percent threshold that triggers disclosure requirements.

As per the latest filing, the SEC began its probe in April 2022 and as part of its inquiries has received thousands of documents from third parties including Musk. The billionaire also testified twice in July 2022.

Regarding the Twitter acquisition, the U.S. Department of Justice or DoJ also had voiced alarm in mid-September, citing testimony from former Twitter employees suggesting a tumultuous atmosphere within the company, potentially jeopardizing compliance with the 2022 administrative order mandated by the Federal Trade Commission or FTC.

Musk is currently X’s largest shareholder, Chief Technical Officer and executive chairman.

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