The Securities and Exchange Commission (SEC) said Thursday that it has applied for a court order to compel Tesla CEO Elon Musk to testify in an ongoing probe related to his $44 billion acquisition of Twitter last year.
The probe pertains to potential violations relating to his purchases of stock in Twitter— which he renamed X after the takeover—as well as his statements and SEC filings made in connection with the purchase last year.
The SEC said that Mr. Musk raised no objections to the subpoena at the time it was served or during the following months. But two days before his scheduled testimony, Mr. Musk “abruptly” notified SEC staff that he would not appear.
“Musk 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,” the regulator said.
Among his objections was that the SEC was trying to “harass” him through its subpoena power. Mr. Musk also stated that his counsel needed time to review potentially relevant material contained in his biography published last month, the SEC said.
“None of Musk’s objections has any legal validity, and he has no justifiable excuse for his non-compliance with the SEC’s subpoena,” it added.
The SEC said it had offered to hold Mr. Musk’s testimony at any of its offices, including one in Fort Worth, Texas, which is the closest to his current residence, and suggested potential dates in October and November. But his counsel informed them on Sept. 24 that Mr. Musk would not appear for testimony in any location.
The SEC also sent a letter to his counsel asking that Mr. Musk inform the commission by Sept. 29 if he had reconsidered and would agree to appear for testimony, but he did not do so.
The regulator said that it had followed all appropriate administrative steps in seeking Mr. Musk’s testimony, but his “blatant refusal” to comply with the investigative subpoena necessitated the court’s intervention to compel his testimony.
“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 SEC said.
“Accordingly, the SEC now asks the Court to compel Musk to appear for investigative testimony,” it added.
Mr. Musk’s attorney, Alex Spiro, stated that the “SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation—enough is enough.”
Mr. Musk, who is also SpaceX 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 Mr. 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 his purchases of Twitter stock, statements, and SEC filings related to the company.
