SEC Investigates Elon Musk’s $44 Billion Twitter Takeover
Elon Musk, the world’s richest man, is now under investigation by the U.S. Securities and Exchange Commission (SEC) regarding his $44 billion acquisition of social media giant Twitter. According to a recent court filing, the SEC is seeking to compel Musk to testify in relation to his purchase of Twitter stock, which Musk later renamed as X, as well as his statements and SEC filings regarding the deal.
The investigation intensifies the ongoing feud between Musk and the SEC, focusing on whether he violated federal securities laws during the Twitter acquisition in 2022. The SEC issued a subpoena to Musk in May 2023, requiring his testimony at their San Francisco office. Initially, Musk agreed to appear on September 15, but two days beforehand, he raised objections and declined to testify. He also refused alternative proposals by the SEC to conduct the deposition in Texas in October or November.
Among his objections, Musk claimed that the SEC was attempting to harass him and that his legal counsel needed time to review relevant material from a biography recently published about him. As per the court filing, Musk has already provided the SEC with documents related to the investigation and had previously given testimony via video conference in July of last year.
Responding to the SEC’s actions, Alex Spiro, an attorney for Musk, stated, The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation – enough is enough. Meanwhile, the SEC maintained that it is seeking Musk’s testimony to gather further information that is relevant to its legitimate and lawful investigation.
Musk’s acquisition of Twitter followed his initial accumulation of a large minority stake in the social media platform, which he disclosed in April 2022. Initially, he indicated that he intended to be a passive stakeholder without influence over Twitter’s management decisions. However, shortly after, Musk accepted and then declined a board seat at Twitter. In late April, he announced plans to acquire the company for $44 billion but subsequently tried to back out of the deal, alleging that Twitter was withholding information about bot activity on its platform. Eventually, facing legal pressure to complete the acquisition, Musk finalized the takeover in late October 2022.
This recent court filing further exacerbates the long-standing conflict between Musk and the SEC. The feud began with Musk’s 2018 tweet, in which he claimed to have secured funding to take his electric car company, Tesla, private. Since then, the SEC has launched multiple investigations into Musk’s conduct, and he has been openly critical of the regulatory agency. In a post on X, Musk expressed the need for a comprehensive overhaul of these agencies and a new commission to hold individuals accountable for misusing their regulatory power for personal and political gain.
In addition to his SEC troubles, Musk is also facing other legal complications. The Justice Department is reportedly investigating Tesla over self-driving claims, while federal prosecutors in New York have opened an inquiry into Musk’s corporate perks and claims related to vehicle driving range. These ongoing legal challenges add to the pressures faced by the billionaire entrepreneur.
As the investigation unfolds, the SEC aims to gather relevant information through Musk’s testimony. However, with Musk refusing to appear at the September deposition, his unprecedented action raises questions about the CEO’s compliance and the potential consequences he may face.
