2 months ago
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Elon Musk, the CEO of X and various other companies with the letter “X” in their names, is in regulators’ crosshairs after skipping testimony this month in an investigation related to Musk’s takeover of Twitter.
In a filing today, the U.S. Securities and Exchange Commission (SEC) said that it intended to seek sanctions against Musk after Musk skipped a court-ordered appearance in San Francisco federal court on September 10. Per the filing, Musk didn’t notify the SEC that he wouldn’t be appearing until just three hours before his testimony was set to begin.
“The Court must make clear that Musk’s gamesmanship and delay tactics must cease,” the filing reads.
Musk instead spent September 10 overseeing the launch of Polaris Dawn, a spacecraft made by his space exploration company, SpaceX, according to the filing.
The SEC’s legal counsel offered to reschedule Musk’s hearing to the following day, September 11. But Musk’s attorney declined, agreeing only to court dates in October.
The SEC is seeking “meaningful conditional relief” if Musk doesn’t appear in court in October. The agency also signaled that it plans to file a sanctions motion against Musk to recoup its travel costs for the canceled testimony and other relief. (In the filing, the SEC said that it spent “thousands of dollars” to fly three attorneys to Los Angeles for the September 10 testimony.)
Musk’s court-mandated appearance stems from the SEC’s probe looking into whether the billionaire followed the law when disclosing his purchases of Twitter stock before acquiring the company for $44 billion in 2022. The probe also seeks to uncover whether Musk’s statements concerning the deal were misleading; the SEC alleges that Musk waited at least 10 days too long to disclose he was buying Twitter shares.
The probe is the second time Musk has been under the SEC’s gun in recent years. In 2018, the agency ordered Musk to step down as Tesla’s chairman and pay $40 million in penalties over tweets related to Tesla shares that the SEC found to be market-manipulating. At the time, Musk called the fraud charges an “unjustified action.”
The SEC has also investigated Musk and Tesla over claims regarding Tesla vehicles’ “full self-driving” capabilities, as well as Tesla’s use of company funds to build Musk a “glass house.”
