SEC seeking to compel testimony from Musk in Twitter investigation
Elon Musk could be facing a federal court order to testify as part of a U.S. Securities and Exchange Commission investigation into his purchase of Twitter, now called X, after he first agreed to speak to federal regulators before reversing course and refusing to show up, according to an SEC filing.
An email seeking comment sent to the company bounced back with an apparently automated message and did not address questions about the SEC case.
The case docket did not list an attorney for Musk.
This is not the first time the world’s richest man has run afoul of the SEC. In 2018, the agency sued him alleging fraud because of a tweet he posted saying that he had secured funding to take electric car maker Tesla, where he is the CEO, private.
The agency eventually sought contempt charges against the billionaire in 2019 after it said he violated the terms of his settlement agreement over the matter. Earlier this year, a San Francisco federal jury found him not guilty of class action fraud allegations brought over his 2018 tweet.
In a filing with a San Francisco federal court, the SEC said it was seeking to compel Musk to speak to the agency in person relating to “an ongoing nonpublic investigation by the SEC regarding whether, among other things, Musk violated various provisions of the federal securities laws” related to his purchase of the social media company, and his statements and filings to federal regulators about it.
In the court filing, the SEC said Musk appeared for multiple half-day sessions of videoconference testimony last summer. Since then, the SEC said it received thousands of new documents from Musk and other sources and reached out to him and his lawyer in May to set up another conversation to be held in September in person at the agency’s downtown San Francisco offices.
Two days before the agreed-upon date, the SEC said, Musk’s lawyer contacted the agency to tell them he refused to come, objecting, among other things, to the choice of San Francisco as the location for testimony, where Musk’s lawyer said he does not live. X is still based in the city.
The date of the planned hearing then came and went, with no Musk and no more testimony, the SEC said in the filing before U.S. District Judge Laurel Beeler.
But even after offering to move the location to the agency’s Fort Worth, Texas, office, the closest it has to Musk’s residence, “or any of the other commission offices across the country” Musk’s lawyer told the SEC that “Musk would not appear for testimony in any location.”
If the SEC does obtain a court order and Musk continues to refuse, he could be held in contempt of court and subject to civil and criminal penalties including fines and imprisonment, according to the SEC.
Musk is facing another lawsuit from Twitter shareholders alleging he waited too long to reveal his stake in the company last year. A New York federal judge ruled earlier this week that shareholders could try and prove Musk defrauded them over the issue.