Elon Musk bought Twitter in October last year for $44 billion, after months of negotiations.
Wilmington:
Elon Musk, the world’s richest man, is under investigation by the U.S. Securities and Exchange Commission over his $44 billion acquisition of social media giant Twitter, according to a lawsuit Thursday in which the agency sought to force Musk to testify.
The investigation — which escalates a long-running feud between the SEC and Musk — concerns whether Musk violated federal securities laws in 2022 when he bought stock in Twitter, which Musk renamed X, as well as statements and SEC filings he made with regard to the agreement.
The SEC said it had subpoenaed Musk in May 2023, requiring him to give testimony at the SEC’s San Francisco office, and that Musk had agreed to appear on September 15. But two days beforehand, Musk had raised “several false objections” and told the SEC he would not appear, the SEC said. Musk also declined SEC proposals to implement the Texas deposition in October or November.
One of his objections was that the SEC was trying to “harass” him and that his counsel needed time to review potentially relevant material from a biography of Musk published last month, the SEC said.
According to the filing, Musk turned over SEC documents related to the investigation and previously provided testimony via video conference last July.
“The SEC has already taken Mr. Musk’s testimony multiple times in this misleading investigation – enough is enough,” said a statement from Alex Spiro, an attorney for Musk.
In a press release, the SEC said it was seeking “Musk’s testimony to obtain information not already in the SEC’s possession that is relevant to its legitimate and lawful investigation.” An SEC spokesperson declined to comment further.
Musk acquired Twitter after initially building a large minority stake in the social media platform, which he first made public in April 2022. Musk was late in filing the disclosure and initially indicated he planned to be a passive stakeholder meaning he had no intention of taking over Twitter. via Twitter or influencing management decisions.
Days later, Musk accepted and then turned down a board seat at Twitter. In late April, he announced plans to buy the company for $44 billion, but then tried to get out of the deal, claiming Twitter wasn’t disclosing the full extent of bot activity on its platform.
Faced with a lawsuit that would force him to complete the deal, Musk completed his acquisition of Twitter in late October 2022.
Argument between Musk and SEC
Thursday’s filing is the latest row between Musk and the SEC, who have been feuding since Musk’s 2018 tweet that he planned to take his electric car maker Tesla private and secure financing. Since then, Musk has repeatedly disparaged the SEC, which has opened multiple investigations into Musk over the years.
“A comprehensive review of these agencies is desperately needed, along with a commission to take punitive action against individuals who have abused their regulatory power for personal and political gain,” Musk said in a post on X.
Howard Fischer, a partner at law firm Moses & Singer and a former SEC official, said Musk’s refusal to appear at the September deposition was extraordinary. “I have never heard of a senior executive with positions at publicly traded companies never showing up.”
Thursday’s lawsuit adds to Musk’s legal troubles. Reuters previously reported that the Justice Department is investigating Tesla over claims about self-driving vehicles. Federal prosecutors in New York have also opened an investigation into Musk’s corporate benefits and vehicle range claims, a source with knowledge of the investigation said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
