Elon Musk Faces Legal Action for Non-Cooperation with SEC Investigation
Elon Musk is facing legal action from the US Securities and Exchange Commission (SEC) after he refused to cooperate with their investigation into his purchase of Twitter, now known as X. The SEC has asked a federal court to compel Musk to comply with their request for a third session of testimony regarding the deal.
This move by the SEC follows a letter from Musk’s lawyer, Alex Spiro, stating that Musk declined to appear for the requested testimony, accusing the SEC of “harassment” and asserting that “unchecked government action is dangerous.”
The SEC initiated its investigation into Musk’s $44 billion acquisition of X last year. The agency is examining whether Musk’s stock purchases in 2022 prior to acquiring the company and his statements about those investments violated securities laws.
Musk had already participated in two half-days of testimony via video conference in July after being subpoenaed. The SEC argues that another session is necessary due to the substantial volume of documents related to the case that arrived after those meetings.
In the letter from Musk’s attorney to the SEC, it was expressed that it is “unclear why the staff requires further time diverting Mr. Musk from his significant obligations to companies and shareholders,” and it emphasised that “enough is enough.”
This legal dispute between Musk and the SEC is the latest in a series of conflicts. In 2018, the SEC charged Musk with defrauding investors when he claimed in a tweet that he had “funding secured” to take Tesla private. He settled the charges by stepping down as chairman of Tesla’s board and agreeing to limitations on his social media posts related to the company.
Musk has made multiple attempts in court to have these restrictions removed, with the most recent attempt occurring in February. In a separate legal matter, a New York judge recently ruled that Musk must face a lawsuit from former Twitter investors who allege he defrauded them by failing to promptly disclose his share purchases, although an insider trading claim was dismissed.