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.
“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,” the attorneys wrote. “Accordingly, the SEC now asks the Court to compel Musk to appear for investigative testimony.”
The SEC said it tried to find an agreeable time and place to meet with Musk, including offering to meet him at the agency’s office in Fort Worth, Texas, “the closest SEC office to Musk’s current personal residence” in the Austin area. Multiple dates were proposed for October and November of this year.
“These good faith efforts were met with Musk’s blanket refusal to appear for testimony,” the suit says.
Alex Spiro, Elon Musk’s attorney, said in a statement about that “the SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation—enough is enough.”
Lawyers for the SEC allege that Musk refused to comply with the subpoena because of “several spurious objections, including an objection to San Francisco as an appropriate testimony location.” Musk had previously raised no objection to that location.
Additionally, the SEC lawyers claim that Musk believed that the commission was using the subpoena as a method to “harass” him, thus justifying his decision to not comply. Musk also allegedly used the recent publication of his biography, written by the journalist Walter Isaacson, as another reason to not appear for testimony, claiming that the book may contain “new information potentially relevant to this matter.”
“The publication of Musk’s biography is not a legitimate basis for Musk to avoid compliance with a lawfully issued investigative subpoena,” the attorneys wrote in the legal filing. “In any event, Musk’s initial refusal to comply with the subpoena has now presented his counsel with plenty of time to review the biography for any relevant information, and so this objection is now moot in addition to being legally insufficient from inception.”
The SEC said in a statement that its “staff is continuing its fact-finding investigation and, to date, has not concluded that any individual or entity has violated the federal securities laws.”
A hearing on the filing is scheduled to take place on Nov. 9, according to the legal filing.
Source : CNBC
