SEC Requests Elon Musk’s Testimony in Twitter Takeover Investigation
The Securities and Exchange Commission (SEC) has asked a federal court to intervene and order Elon Musk to comply with their ongoing investigation into his 2022 takeover of Twitter, now known as X. A recent report by The Wall Street Journal states that Musk was scheduled to testify on September 15 but failed to appear at the SEC’s San Francisco office. The agency later offered to allow him to testify closer to his Texas home, but Musk refused to appear for testimony.
The SEC is currently examining Musk’s purchase of Twitter stock and his disclosures of his investment in the company. The Wall Street Journal previously reported in May that the securities regulators were investigating Musk’s delayed disclosure of his stake.
In response to the SEC’s move, Musk took to Twitter, stating, A comprehensive overhaul of these agencies is sorely needed, along with a commission to take punitive action against those individuals who have abused their regulatory power for personal and political gain… Can’t wait for this to happen.
The U.S. Securities and Exchange Commission has filed a Litigation Release titled Elon R. Musk, announcing an application for an order that would compel Musk’s compliance with their investigative enforcement action. Failure to comply with a subpoena issued by SEC enforcement staff may lead to a subpoena enforcement action in federal district court.
The SEC’s filing in the U.S. District Court for the Northern District of California clarifies that Musk’s testimony subpoena pertains to an ongoing investigation into potential violations of federal securities laws. This includes Musk’s 2022 purchases of Twitter, Inc. stock and his statements and SEC filings related to Twitter. The SEC seeks Musk’s testimony to gather information not already in their possession, which is relevant to their legitimate and lawful investigation.
According to the SEC, Musk failed to appear for testimony despite previously agreeing to a mutually agreed-upon date in September 2023. He had been served with a subpoena in May 2023 for his appearance at the SEC’s San Francisco Regional Office on that designated date. The SEC also notes that Musk did not raise any objections to the subpoena until two days before his scheduled testimony in September, when he informed the agency of his refusal to appear. Musk’s objections were considered spurious by the SEC.
The SEC’s staff application to the court requests an order directing Musk to comply with the subpoena. The court’s ruling will determine the outcome. The SEC continues its fact-finding investigation and has not yet concluded whether any individual or entity has violated federal securities laws.
This ongoing dispute between Elon Musk and the SEC raises serious implications. Musk’s reluctance to cooperate in providing testimony could potentially lead to legal complications for him. The SEC remains determined to pursue its investigation and gather the necessary information regarding Musk’s Twitter takeover and related disclosures. With Musk’s refusal to appear, it remains to be seen how this situation will unfold and what consequences it may have for the billionaire entrepreneur.
