SEC Files Suit Against Elon Musk for Noncompliance in Twitter Stock Purchase Investigation

SEC Files Suit Against Elon Musk for Noncompliance in Twitter Stock Purchase Investigation | Enterprise Wired

Share Post:

LinkedIn
Twitter
Facebook
Reddit

The U.S. Securities and Exchange Commission (SEC) has taken legal action against Elon Musk, filing a lawsuit on Thursday to compel the Tesla CEO to testify regarding his acquisition of Twitter last year.

Stance of SEC

According to legal documents released in the Northern District of California, the SEC alleges that Musk failed to comply with a subpoena requiring him to testify on September 15. The subpoena was reportedly served to Musk in May 2023, and the SEC contends that his refusal to appear is hindering and delaying their investigation into potential securities fraud related to the purchase of Twitter shares last year.

The SEC’s broader investigation is focused on determining whether securities laws were violated during the purchase of Twitter shares while Musk was acquiring stock in the company. The Tesla CEO finalized the purchase of Twitter, now rebranded as X, in October in a deal valued at approximately $44 billion.

In the legal filing, attorneys for the SEC expressed frustration over Musk’s continuous refusal to comply, stating, “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.” Consequently, the SEC is urging the court to compel Musk to appear for investigative testimony.

SEC suing Elon Musk to force him to testify in Twitter probe

The SEC claims it made multiple efforts to coordinate a meeting with Musk, offering various times and locations, including its office in Fort Worth, Texas, which is the closest to Musk’s residence in Austin. However, according to the SEC, Musk consistently refused to appear for testimony, citing objections to the location and alleging harassment by the commission.

Elon Musk’s Response

Elon Musk’s attorney, Alex Spiro, issued a statement in response, asserting that the SEC has already taken Musk’s testimony multiple times and deeming the investigation misguided. Spiro argued, “enough is enough.”

The SEC lawyers also contest Musk’s objections, stating that he raised “spurious objections” and refused compliance on the grounds of his biography’s recent publication by journalist Walter Isaacson. The SEC argues that this is not a legitimate reason to avoid complying with the subpoena.

A hearing on the SEC’s filing is scheduled for November 9, marking the next chapter in the ongoing legal saga between Elon Musk and the regulatory body. The SEC clarified in a statement that their investigation is still ongoing, and no conclusions regarding violations of federal securities laws have been reached at this point.

Read More: X to auction off old Twitter items, from desk chairs to paintings of Ellen DeGeneres’ Oscar Selfie

Subscribe

RELATED ARTICLES

OpenAI Partially Prevails as Judge Dismisses Copyright Lawsuits by Silverman and Tremblay

OpenAI Partially Prevails as Judge Dismisses Copyright Lawsuits by Silverman and Tremblay

Federal Judge Rules on OpenAI’s Use of Authors’ Works in Training AI Model In a significant development, two copyright infringement…
FTC Investigates Drug Supply Chain: Focus on Middlemen Amid Generic Drug Shortages

FTC Investigates Drug Supply Chain: Focus on Middlemen Amid Generic Drug Shortages

Source- PYMNTS.com Federal Trade Commission and HHS Seek Solutions for Ongoing Drug Shortages In response to the persistent shortages of…
Cisco Announces Workforce Reduction Amid Industry Downturn

Cisco Announces Workforce Reduction Amid Industry Downturn

Source- BNN Breaking Tech Giant to Cut 5% of Workforce, Eliminating 4,250 Jobs In a move to streamline operations amidst…
Lyft CEO Takes Responsibility for Earnings Error, Stock Soars

Lyft CEO Takes Responsibility for Earnings Error, Stock Soars

Major Error Causes Stock Surge and Subsequent Correction Lyft CEO David Risher has acknowledged responsibility for a significant error in…