US SEC sues Musk for not cooperating in Twitter probe
What's the story
The US Securities and Exchange Commission (SEC) is taking legal action against Elon Musk, after the billionaire said he would no longer cooperate with SEC's investigation into his $44 billion acquisition of Twitter, now called X.
The probe focuses on whether Musk broke federal securities laws in 2022 while buying Twitter stock and making statements and SEC filings related to the transaction.
Details
Musk's previous testimony and refusal to appear
Musk was subpoenaed by the SEC in May 2023 to testify in San Francisco.
Initially, he agreed to appear on September 15, but just two days before, he started raising objections and told the SEC he wouldn't attend.
He also turned down the SEC's offers to hold the deposition in Texas during October or November.
Musk claimed the SEC was trying to 'harass' him and that his lawyer needed time to review potentially relevant material from a recently published biography.
What Next?
Enough is enough: Musk's lawyer
Reacting to the lawsuit, Musk's attorney, Alex Spiro, said, "The SEC has already taken Mr. Musk's testimony multiple times in this misguided investigation - enough is enough."
The SEC has obtained documents from Musk related to the probe, and he previously testified via video conference in July last year.
In a press release, the SEC mentioned that they wanted Musk's testimony to get more relevant information "not already in the SEC's possession" for their legal investigation.
Insights
Unchecked government action is dangerous: Spiro
"Unchecked government action is dangerous and the record here is troubling. Mr. Musk declines to acquiesce in the Commission's incursions and therefore refuses to appear as you demand," Musk's legal representative Spiro said.
The lawsuit is the most recent conflict between the SEC and Musk, who had previously publicly stated on national television that he had "no respect" for SEC.
Insights
Musk-SEC feud history
This lawsuit is just another chapter in the ongoing battle between Musk and the SEC.
In 2018, the SEC accused him of defrauding investors by claiming in a tweet that he had "funding secured" to take Tesla private.
He settled the charges by resigning as the company's board chairman and agreeing to adhere to restrictions, in what was popularly referred to as a "Twitter sitter," which limited what he could post on social media regarding the company.
Insights
Musk's call for regulatory revamp
Since then, Musk has consistently criticized the SEC, which has launched multiple investigations into him over the years.
In a post on X, the billionaire had called for a complete revamp of regulatory agencies and a commission to punish individuals abusing their regulatory power for personal and political gains.
Facts
Musk's refusal to testify is highly unusual: Ex-SEC official
Howard Fischer, a partner at law firm Moses & Singer and former SEC official, called Musk's refusal to appear at the testimony extraordinary.
He said, "I have never heard of a senior executive who has positions at public companies ever not showing up."
The lawsuit adds to Musk's legal woes, as the US Department of Justice probes Tesla's self-driving claims, and federal prosecutors in New York investigate Musk's corporate perks and claims about vehicle driving range.
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