Elon Musk Opposes SEC’s Demand for Testimony in Twitter Takeover Probe

Elon Musk Opposes SEC’s Demand for Testimony in Twitter Takeover Probe | Mr. Business Magazine

New York, November 2 (Reuters) – Elon Musk has urged a federal judge not to compel him to testify in the U.S. Securities and Exchange Commission’s (SEC) investigation into his $44 billion acquisition of the social media platform Twitter. Musk submitted his objections to the court in San Francisco, where the SEC filed a lawsuit on October 5, seeking his testimony as part of the probe initiated in April 2022. According to Musk’s legal team, the SEC’s subpoena exceeds its investigative authority, imposes undue burdens, and seeks irrelevant evidence.

SEC Claimed — Elon Musk Declined to Participate

The SEC’s investigation centers on Musk’s Twitter stock purchases in 2022, his statements, and SEC filings regarding Twitter, which Musk subsequently renamed as “X.” The SEC has claimed that Musk declined to participate in a September interview related to the investigation. Alex Spiro, one of Musk’s attorneys, previously criticized the SEC’s investigation, describing it as “misguided.” In the recent court filing, Musk’s legal team asserted that the SEC’s pursuit of Musk amounts to harassment. As of now, the SEC has not responded to requests for comment. Previously, the SEC argued that it was well within its authority to seek additional testimony from Elon Musk, especially given the new documents it has obtained during the investigation since his last interview.

Elon Musk Disclosed his Acquisition

On April 4, 2022, Musk disclosed his acquisition of a 9.2% stake in Twitter, 11 days after the SEC’s deadline for such disclosures. Initially, Musk stated that he intended to be a passive stakeholder, meaning he had no plans to take over the company. However, he later announced his intention to purchase Twitter for $44 billion. Musk subsequently attempted to back out of the deal, claiming that Twitter had not fully disclosed the extent of bot activity on its platform. After facing a lawsuit to complete the acquisition, Musk finalized the Twitter takeover in late October 2022.

Musk had previously provided the SEC with documents related to the investigation and testified via video conference in July of the previous year, as stated in the SEC’s court filing. The SEC, upon reviewing the documents, expressed a need for additional inquiries with Musk.

SEC suing Elon Musk to force him to testify in Twitter probe

SEC has Issued 32 Subpoenas

In the course of this investigation, the SEC has issued 32 subpoenas and conducted interviews with Elon Musk and at least three other individuals on seven different occasions, according to Spiro’s second court filing. Musk himself has received five subpoenas for documents and an additional three for testimony. The court documents highlighted that the SEC has spent 18 months investigating Musk for an allegedly untimely filing, characterizing it as the latest episode in a more than five-year history of what Musk perceives as harassment by the regulatory agency.

The Latest Episode of this Legal Battle

This legal battle is the latest episode in the contentious relationship between the U.S. market regulator and Elon Musk, currently the world’s wealthiest individual. The SEC previously sued Musk in 2018 over his social media posts claiming to have “funding secured” to take electric vehicle manufacturer Tesla Inc. private. Musk eventually settled but was sued again in 2019 for purportedly violating the settlement terms. Simultaneously, Musk has accused the SEC of initiating “endless” investigations into him and Tesla. He has also announced his intent to petition the U.S. Supreme Court to review the legality of his SEC settlement, which mandates that he consult with a Tesla lawyer before posting some of his social media content.

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