Elon Musk sued by SEC for refusing to comply with subpoena regarding his purchase of Twitter
Published: 18:21 05 Oct 2023 EDT
The US Securities and Exchange Commission has sued Elon Musk in order to compel him to give testimony regarding his purchase of Twitter Inc (NYSE:TWTR) last year, according to a complaint filed Thursday in the Northern District of California.
Attorneys for the SEC alleged that Musk failed to appear for testimony on September 15 as required by a subpoena, which the attorneys said was served to Musk in May.
The investigation concerns whether anyone committed securities fraud in purchasing Twitter stock last year as Musk was buying the company. Musk closed his $44 billion acquisition of the social media platform, which he renamed X, in October 2022.
“Musk’s ongoing refusal to comply with the SEC’s administrative subpoena is hindering and delaying the SEC staff’s investigation to determine whether violations of the federal securities laws have occurred,” the attorneys wrote in the complaint. “Accordingly, the SEC now asks the Court to compel Musk to appear for investigative testimony.”
The SEC said it worked to find a time and place to meet with the Tesla CEO, including offering to meet him at the agency’s Fort Worth, Texas office, the closest SEC office to Musk’s home.
Lawyers allege Musk refused to comply with the subpoena over “spurious objections, including an objection to San Francisco as an appropriate testimony location.” They also claim that Musk believed the agency was using the subpoena as a tool to harass him.
Additionally, Musk allegedly tried to use the recent publication of his biography as a reason to not comply, arguing the book could contain “new information potentially relevant to this matter.”
SEC lawyers weren’t having it.
“The publication of Musk’s biography is not a legitimate basis for Musk to avoid compliance with a lawfully issued investigative subpoena,” the attorneys wrote in the legal filing.
Notably, the agency said it has not yet concluded that any individual or entity committed securities fraud.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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