SEC Sues Elon Musk: Shocking Twist in Twitter Purchase Investigation

By Kevin • October 7, 2023 4:14 pm • Comments

The U.S. Securities and Exchange Commission (SEC) has taken legal action against billionaire Elon Musk in an attempt to compel him to testify in the agency’s investigation into his contentious acquisition of Twitter in 2022.

The SEC is examining whether Musk violated securities laws during his purchase of Twitter stock and his public statements regarding the company last year. The regulator alleges that Musk failed to appear for scheduled testimony in San Francisco in September, despite being served a subpoena in May 2023.

Elon Musk completed his tumultuous $44 billion takeover of Twitter in October 2022, following months of legal challenges.

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As Twitter’s CEO, he made significant changes, including reinstating banned accounts, laying off approximately 80% of employees, and rebranding the platform as “X” by July 2023.

By filing this lawsuit in federal court, the SEC aims to compel Musk to provide testimony regarding the Twitter deal for their ongoing investigation.

Watcher.guru reports:

The U.S. Securities and Exchange Commission filed a lawsuit against billionaire Elon Musk on Thursday. The SEC lawsuit seeks to compel Elon Musk to testify in the agency’s investigation into his controversial purchase of Twitter last year.

The SEC is probing whether Musk violated securities laws during his acquisition of Twitter stock and in his public statements about the company in 2022.

However, the regulator says Musk failed to appear for scheduled testimony in San Francisco last month.

By filing a suit in federal court, the SEC aims to force Elon Musk to answer questions about the Twitter deal for their investigation. The agency needs his testimony to determine if securities regulations were broken during the blockbuster acquisition.

The agency needs his testimony to determine whether securities regulations were violated during the high-profile acquisition.

The SEC alleges that Musk refused to comply with the subpoena citing various objections, including the location of the testimony, despite initially having no objections to it.

Furthermore, Musk claimed that the SEC was using the subpoena to “harass” him and used the recent publication of his biography as a reason to avoid testifying. The SEC contends that these objections are not valid reasons to refuse compliance.

CNBC reports:

The U.S. Securities and Exchange Commission sued Elon Musk on Thursday in an effort to compel the billionaire to testify over his purchase of Twitter last year.

Attorneys representing the SEC alleged in a legal filing released in the Northern District of California that Musk failed to appear for a Sept. 15 testimony as required by a subpoena, which the attorneys said was served to the Tesla
CEO in May 2023.

Broadly, the SEC said the investigation is tied to whether anyone committed securities fraud in purchasing Twitter shares last year as Musk was buying stock in the company.

Musk closed his acquisition of Twitter, now known as X, in October in a deal worth roughly $44 billion.

Elon Musk’s attorney, Alex Spiro, responded to the lawsuit by stating that the SEC had already taken Musk’s testimony multiple times during the investigation, implying that further testimony is unnecessary.

A hearing on this legal action is scheduled for November 9, as per the filing.

The SEC emphasized that its staff is continuing its investigation and has not yet concluded whether any individuals or entities have violated federal securities laws in connection with the Twitter acquisition.

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