Elon Musk Agrees to Testify in SEC Probe of His $44 Billion Twitter Buyout

Elon Musk in Los Angeles, Calif., on April 13, 2024. (Etienne Laurent/AFP via Getty Images)

Tesla CEO Elon Musk has agreed to testify in the Securities and Exchange Commission’s (SEC) investigation into his $44 billion acquisition of social media platform Twitter, now renamed X, according to a May 30 court filing.

Mr. Musk has waived his right to appeal a court order requiring him to comply with the SEC’s subpoena and sit for no more than five hours of questioning at one of the SEC’s offices, the document stated.

Mr. Musk and the SEC have agreed on a date to conduct the testimony, but it was not disclosed in the document due to “confidentiality purposes,” according to the court filing.

The document also stated that the testimony date and time agreed upon by both parties can only be rescheduled with written consent by the SEC or by a court order.

The SEC filed a lawsuit on October 5, 2023, after Mr. Musk refused to appear for testimony in September as part of the regulator’s investigation into potential violations related to his purchases of stock in Twitter as well as his statements and SEC filings made in connection with the purchase in 2022.

The SEC said that Mr. Musk raised no objections to the subpoena at the time it was served or during the following months. However, two days before his scheduled testimony, Mr. Musk “abruptly” notified SEC staff that he would not appear.

According to the suit, Mr. Musk had testified twice in July 2022, but the SEC said that additional testimony from Mr. Musk is necessary due to the “thousands of new documents” it received from various parties.

The SEC said that it had followed all appropriate administrative steps in seeking Mr. Musk’s testimony, but his “blatant refusal” to comply with its subpoena necessitated the court’s intervention to compel his testimony.

Musk’s Refusal to Testify

A magistrate judge ruled in favor of the regulator on Feb. 10 and ordered Mr. Musk to testify again. According to the ruling, Mr. Musk did not appear to give testismony “on the grounds that the SEC’s investigation is baseless and harassing and seeks irrelevant information.”

However, U.S. Magistrate Judge Laurel Beeler said that the court ruled to enforce the SEC’s subpoena because the evidence is relevant and the testimony is “not unduly burdensome” for Mr. Musk.

“Because the SEC issued its subpoena lawfully, the burden shifts to the respondent to prove that the subpoena was issued in bad faith or for an improper purpose, such as harassment or to pressure that person to settle a collateral dispute ... or is overbroad or unduly burdensome. The respondent has not met this burden,” Judge Beeler stated.

“He did not object to the subpoenas initially and asked only for an accommodation for his schedule. Only later did he object to the testimony as irrelevant and harassing, in part because he testified twice previously,” the judge added.

The logo of the social media platform X on a phone screen in Frankfurt, Germany, on March 11, 2024. (Kirill Kudryavtsev/AFP via Getty Images)

Mr. Musk, who is also the CEO of SpaceX, offered to buy the social media platform for $44 billion, or $54.20 per share, in April 2022.

He finally acquired Twitter in October 2022. He had tried to back out of the purchase, leading the company to sue him to force the acquisition. Following the takeover, Twitter was rebranded to X.

The SEC said it authorized an investigation in April 2022 into whether any securities laws were broken in connection with his purchases of Twitter stock, statements, and SEC filings related to the company.

The Associated Press contributed to this report.