SEC Seeks Court Order to Compel Elon Musk’s Testimony in Twitter Takeover Investigation
The U.S. Securities and Exchange Commission (SEC) has filed a court motion to compel Elon Musk, CEO of Tesla, to testify in its investigation into 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 Tesla’s privatization plans.
Legal 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 relevant documents. Former SEC officials have stated that this case is different from previous encounters between Musk and the SEC, as it revolves around enforcing a subpoena.
If Musk defies the court’s order, he could face fines and, in extreme cases, even jail time. The SEC is investigating whether Musk violated securities laws in 2022 when he purchased stock in Twitter, which he subsequently renamed X. Musk had previously provided documents and testified via videoconference for the SEC’s investigation, but the agency later received new information and issued a subpoena for Musk to testify again.
Musk initially agreed to testify but later raised objections, citing harassment and the need for his counsel to review relevant material from a recently published biography. The SEC has proposed alternative locations for Musk’s testimony, but he has refused those options as well.
Legal experts suggest that it is not uncommon for federal agencies to seek additional testimony as investigations progress. The court is likely to order Musk to provide further testimony, as long as the subpoena is deemed part of a legitimate effort to obtain information.
The SEC has previously exercised its subpoena rights successfully, compelling individuals like Jay-Z to testify after they initially ignored subpoenas. In 2018, a judge challenged the settlement between Musk and the SEC, which required the vetting of his tweets, and urged both parties to resolve their differences reasonably.
Despite Musk’s contentious relationship with the SEC, legal experts believe that the court will focus on whether the agency has reasonably accommodated Musk’s schedule and logistical considerations. Lawyers interviewed by Reuters believe that the SEC has met this requirement.
Elon Musk’s ongoing battle with the SEC has drawn attention to the extraordinary feud between the world’s richest man and the most powerful securities regulator. While the stakes may be lower in this case, it highlights the ongoing struggle to bring Musk into compliance with regulatory requirements.
As the legal proceedings unfold, it remains to be seen how the court will address Musk’s objections and whether he will ultimately be compelled to testify. The outcome of this case could have implications for future interactions between Musk and the SEC, as well as for the broader regulatory landscape.