SEC Plans to Seek Sanctions Against Elon Musk in Twitter Probe

The US Securities and Exchange Commission said Friday it plans to seek sanctions against Elon Musk after he failed to appear for court-ordered testimony for the regulator’s investigation into the $44 billion takeover of Twitter.

In a filing in federal court in San Francisco, the SEC said the sanctions motion will seek an order showing why Musk should not be held in civil contempt for waiting up to three hours before scheduled testimony for September 10, to advise him that he would not present. Above.

Musk, whose businesses include electric car maker Tesla and rocket company SpaceX and is the world’s richest person, went to Cape Canaveral in Florida that day to oversee the launch of SpaceX’s Polaris Dawn mission.

But the SEC said that, as SpaceX’s chief technical officer, Musk “definitely already knew” of the planned launch because the company had discussed it two days earlier. Musk’s actions were said to have violated a May 31 court order requiring him to testify.

“Musk’s apology itself reeks of skill,” SEC attorney Robin Andrews wrote. “The court needs to make it clear that Musk’s gamesmanship and delaying tactics must stop.”

Alex Spiro, Musk’s lawyer, called the sanctions “drastic” and unnecessary, saying that Musk’s absence from the launch could have endangered the lives of the astronauts and that his testimony was rescheduled for October 3.

Musk’s failure to testify on Sept. 10 resulted from an “emergency” he did not cause, and “there is no reason to believe such an emergency will reoccur,” Spiro wrote.

An SEC spokesman declined to comment, although the regulator said in the court filing that there is nothing to dissuade Musk from appearing on Oct. 3.

The SEC is investigating whether Musk violated securities laws in early 2022 when he began accumulating Twitter shares.

Musk has been criticized, including by Twitter shareholders, for waiting at least 10 days too long to reveal that he is buying Twitter shares.

Investors must disclose when they reach 5% ownership of public companies. Musk eventually disclosed a 9.2 percent stake in Twitter and shortly thereafter offered to buy the entire company.

In July, Musk said he misunderstood the SEC’s disclosure requirements and that “all indications” suggest his delay was a “mistake.”

The SEC sued last October after he missed a scheduled interview at his San Francisco office.

Musk said the SEC is trying to “harass” him with subpoenas.

He has long clashed with the SEC, including after it sued him in 2018 over his tweets about taking Tesla private.

Musk settled that lawsuit by paying a $20 million fine, agreeing to let Tesla’s lawyers review some postings in advance and stepping down from his role as Tesla’s president.

Photo: Patrick Pleul/Pool via AP, File