The SEC filed a lawsuit against Elon Musk, seeking to compel him to testify about his acquisition of a large amount of Twitter shares worth around $3 billion before his takeover of the social network.
Per the suit, filed Oct. 5 in federal court in San Francisco, Musk was scheduled to appear for testimony Sept. 15 at the SEC’s San Francisco Regional Office after receiving a subpoena. However, “two days before his scheduled testimony, Musk abruptly notified the SEC staff that he would not appear,” according to the lawsuit.
“Musk attempted to justify his refusal to comply with the subpoena by raising, for the first time, several spurious objections, including an objection to San Francisco as an appropriate testimony location,” the SEC’s lawsuit says. Twitter, now renamed X by Musk, maintains its headquarters in San Francisco.
“The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation — enough is enough,” Alex Spiro, an attorney for Musk, said in a statement to Bloomberg, which first reported the news.
Before Musk made a $44 billion bid for Twitter (which he tried to back out of, before he was taken to court by Twitter and forced to consummate the original agreement), he had bought shares of Twitter when it was a publicly held company. Between January-April 2022, he accumulated a 9.2% stake in the company. The SEC has said that Musk failed to meet a deadline to publicly disclose the purchases of Twitter stock, under a rule that requires any investor who acquires more than 5% interest in a public company do so within 10 days.
A copy of the SEC’s suit is available at this link. The complaint noted that agency staff is available to conduct Musk’s testimony the weeks of Nov. 13, Nov. 27, Dec. 4 or Dec. 11, 2023.
It’s not the first time the SEC has taken legal action against Musk. In 2018, the agency sued him alleging securities fraud after he tweeted that he had secured funding for a private takeover of Tesla. Musk settled the case, paying $40 million in penalties, without admitting guilt.
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