SEC Files Lawsuit Against Elon Musk, Seeking Testimony in Twitter Takeover Investigation

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, CEO of Tesla, in an effort to compel his testimony regarding his $44 billion takeover of social media giant Twitter. This marks the third time the SEC has taken legal action against Musk, with previous cases relating to his tweets about taking Tesla private.

Experts believe that the SEC is on solid ground in this case, as the law clearly grants the agency the power to demand investigative testimony and gather documents. Former SEC officials have stated that this lawsuit is different from previous ones, as it focuses on enforcing a subpoena.

If Musk defies the court’s order to testify, he may face fines and, in extreme scenarios, even jail time. The SEC is investigating whether Musk violated securities laws in 2022 when he purchased stock in Twitter, which he later renamed X. Musk had initially provided documents and testified via videoconference for the SEC’s investigation, but later refused to appear for further testimony.

Musk’s objections to testifying include claims of harassment by the SEC and the need for his counsel to review potentially relevant material from a recent biography. However, legal experts suggest that it is not uncommon for federal agencies to seek additional testimony as investigations progress.

The SEC has previously been successful in enforcing subpoenas, as seen in cases involving Jay-Z and Terraform Labs’ founder. In the past, Musk has disputed the SEC’s findings and has attempted to rescind the 2018 settlement. However, the focus of the current lawsuit is on whether the SEC has been accommodating of Musk’s schedule and logistical considerations.

While Musk may be trying to make a point and assert his independence, legal experts interviewed by Reuters believe that it is unlikely he will win this battle. The San Francisco court is expected to assess whether the SEC has met the necessary requirements, rather than considering Musk’s strained relationship with the agency.

The outcome of this lawsuit will shed further light on the ongoing feud between Musk and the SEC, which has struggled to rein in the world’s richest man. As the case progresses, it remains to be seen how the court will rule and what impact it will have on Musk’s future interactions with regulatory agencies.