SAN FRANCISCO ā The Securities and Exchange Commission said Thursday it is seeking a court order that would compel Elon Musk to testify as part of an investigation into his purchase of Twitter, now called X.
The SEC said in a filing in a San Francisco federal court that Musk failed to appear for testimony on Sept. 15 despite an investigative subpoena served by the SEC and having raised no objections at the time it was served.
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But ātwo days before his scheduled testimony, Musk abruptly notified the SEC staff that he would not appear,ā said the agencyās filing. āMusk attempted to justify his refusal to comply with the subpoena by raising, for the first time, several spurious objections, including an objection to San Francisco as an appropriate testimony location.ā
X is based in San Francisco.
Muskās attorney, Alex Spiro, said in an emailed statement Thursday that the āSEC has already taken Mr. Muskās testimony multiple times in this misguided investigation ā enough is enough.ā
The SEC said it has been conducting a fact-finding investigation involving the period before Muskās takeover last year when Twitter was still a publicly traded company. The agency said it has not concluded that anyone has violated federal securities laws.
The Tesla CEO closed his $44 billion agreement to buy Twitter and take it private in October 2022, after a months-long legal battle with the social media company's previous leadership.
After Musk signed a deal to acquire Twitter in April 2022, he tried to back out of it, leading the company to sue him to force him to go through with the acquisition.
The SEC said that starting in April 2022, it authorized an investigation into whether any securities laws were broken in connection with Muskās purchases of Twitter stock and his statements and SEC filings related to the company.
A lawsuit filed that same month by Twitter shareholders in New York alleged that the billionaire illegally delayed disclosing his stake in the social media company so he could buy more shares at lower prices.
That complaint brought by a pension fund for Oklahoma firefighters centers around whether Musk violated an SEC regulatory deadline to reveal he had accumulated a stake of at least 5%. The delay, the lawsuit alleges, hurt less wealthy investors who sold shares in the company in the nearly two weeks before Musk acknowledged holding a major stake.
U.S. District Judge Andrew Carter last week rejected Musk's attempt to dismiss the case, expressing doubt about suggestions that "Musk was somehow ātoo busyā to comply with SEC disclosure rules about his ownership stake in Twitter, while simultaneously buying millions of shares of stock of Twitter, tweeting about the state of Twitter as a social media platform, and meeting with several Twitter executives and insiders." Carter, however, did dismiss part of the lawsuit alleging the actions amounted to insider trading.
The SEC's Thursday court filing doesn't detail the specifics of what its investigation is about, but argues that the agency is responsible for protecting investors and has broad authority to conduct investigations and that Musk has no basis to refuse to comply.
The SEC said Musk objected to testifying in San Francisco because he doesnāt live there, so the commission said it offered to do it at any of its 11 offices, including one in Fort Worth, Texas, closer to where Musk lives. The SEC said on Sept. 24, Muskās lawyers responded by saying Musk would not appear for testimony in any location.
Musk also objected to testifying on grounds that a biography on him by Walter Isaacson published on Sept. 12 contained ānew information potentially relevant to this matterā and his lawyers needed time to review it. But the filing says the book's publication is ānot a legitimate basis" for Musk to avoid a legal subpoena and in āany event, Muskās initial refusal to comply with the subpoena has now presented his counsel with plenty of time to review the biography for any relevant information."
A hearing on the matter is tentatively scheduled for Nov. 9 in San Francisco.