SEC Wins Subpoena Battle Against Elon Musk in Twitter Probe
A federal judge has ruled in favor of the Securities and Exchange Commission (SEC), ordering billionaire Elon Musk to testify again in the agency’s investigation into his 2022 purchase of Twitter. Musk, who has already testified twice, failed to show up for a third session and has been resisting a subpoena, claiming the SEC’s requests were unreasonable and harassing.
U.S. Magistrate Judge Laurel Beeler of the Northern District of California stated that the SEC had the authority to issue a subpoena and that the evidence being sought is relevant and material to the investigation. The judge also ruled that the testimony is not unduly burdensome. Musk’s lawyer did not respond to a request for comment.
The SEC has been pursuing additional testimony from Musk since it received “thousands of new documents” following his initial appearances in July 2022. The agency wants to question him about the new information that has emerged since then. Both sides have been instructed to confer within a week to determine a date and location for the testimony. If they fail to reach an agreement, they can submit separate briefs, and the court will make a decision.
The SEC is investigating whether Musk committed civil fraud by failing to disclose his plans for Twitter, now known as X, when he purchased its shares between January and April 2022. Musk initially stated that he was a passive shareholder and had no intentions of taking over or influencing Twitter. However, he later revealed that he had been invited to join the company’s board and eventually bought Twitter for $44 billion in October 2022.
Musk was originally scheduled to testify on September 15, but he did not appear. The SEC then offered to meet with him in October in Fort Worth, Texas, which is closer to his home in Austin. However, Musk refused to cooperate, calling the investigation “frivolous” and criticizing the SEC’s document requests and demand for further testimony as “troubling government action.” Despite the SEC’s request for him to reconsider, Musk did not respond.
The outcome of this battle between Musk and the SEC will have significant implications for the ongoing investigation into his Twitter purchase. With the judge ruling in favor of the SEC’s subpoena, Musk will now be compelled to provide further testimony. It remains to be seen how this development will impact the case and whether any new evidence will emerge during the upcoming testimony.
Analyst comment
Negative news for Elon Musk. The ruling in favor of the SEC’s subpoena means Musk will have to provide further testimony, which could potentially have negative implications for him in the ongoing investigation into his Twitter purchase. The outcome remains uncertain, and it is unclear if any new evidence will emerge during the upcoming testimony.
