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.
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.