Elon Musk Didn’t Show Up to Testify in Investigation into His $44 Billion Twitter Takeover. Now the SEC Wants to Sanction Him

New York
CNN
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The U.S. Securities and Exchange Commission intends to seek sanctions against Elon Musk for failing to testify in an investigation into his acquisition of Twitter, now called X, the regulator said in a court filing Friday.

Earlier this year, a federal judge ordered Musk to testify as part of the Securities and Exchange Commission’s investigation into the billionaire’s $44 billion Twitter takeover. The agency is examining whether Musk complied with the law when disclosing his Twitter stock purchases and whether his statements about the deal were misleading.

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After some initial back-and-forth, the two sides agreed that Musk would testify on Sept. 10, and SEC lawyers flew to Los Angeles to take Musk’s testimony, according to a court filing Friday. But three hours before his testimony was to begin, Musk’s lawyer told the SEC that his client, who also runs SpaceX, had an urgent trip to the East Coast for the Polaris Dawn mission launch and would not be able to attend the testimony or reschedule it for the following day, according to the filing.

The two sides then struggled to find time to reschedule the testimony before reaching a date in early October, according to the filing.

The SEC alleges that Musk violated a court order requiring him to “seek written approval from the SEC or a court order to amend his deposition date,” which it says he did not do before failing to appear on September 10.

“Musk’s excuse itself is a ruse,” the SEC said in its filing. “SpaceX had already announced that it was targeting a Tuesday morning launch two days earlier… As the company’s chief technology officer, Musk was already aware by that time that SpaceX was targeting the morning of his SEC testimony for the launch.”

“Despite this advance knowledge, Musk did not notify the SEC of his intention to attend the launch until three hours before his testimony began, and after the SEC had spent thousands of dollars to fly three lawyers to Los Angeles,” she continued.

Musk had previously tried to fight efforts to testify again in the investigation, saying he had already done so twice.

The SEC asked the court to impose “meaningful conditional relief” if Musk fails to appear at the new October testimony. The SEC also said it intends to seek sanctions against Musk to recover his travel costs for the canceled testimony and for other damages.

In a response filing, Musk’s lawyers argued that “the court’s intervention is not necessary, as the parties have already agreed to a new deposition date… Mr. Musk is already under order from this court to appear ‘absent an emergency that he did not create and cannot avoid.’”

The filing marks the latest flare-up in long-simmering tensions between Musk and the SEC, which began in 2018 when the agency announced He filed a lawsuit against him. For falsely tweeting that he had “funded” to take Tesla private.