TLDR:
SEC seeks sanctions against Elon Musk for missing court-ordered testimony on Twitter purchase
Musk faces potential arrest if found in contempt of court
SEC investigating possible securities fraud in Muskâs Twitter acquisition
Musk accused of delay tactics and non-compliance with SEC investigations
Legal battles extend to EU content regulation issues for Twitter/X
The Securities and Exchange Commission (SEC) has intensified its legal pursuit of Elon Musk, seeking sanctions against the Tesla and SpaceX CEO for failing to appear at a court-ordered testimony.
This latest development is part of the SECâs ongoing investigation into Muskâs $44 billion acquisition of Twitter, now rebranded as X.
The SECâs probe, which has been active for nearly a year, centers on potential securities law violations surrounding the Twitter purchase.
The agency has accused Musk of employing delay tactics and non-compliance, citing his last-minute cancellation of a scheduled deposition on September 10, 2024. SEC lawyer Robin Andrews described Muskâs actions as âgamesmanshipâ in a recent court filing.
The federal court has been asked to compel Musk to explain why he should not be held in civil contempt. The SEC argues that Muskâs behavior violates a May 31 court order mandating his testimony. The agency is prepared to escalate its enforcement actions if Musk continues to disregard legal obligations.
Muskâs legal team, led by attorney Alex Spiro, contends that the missed testimony was due to unforeseen circumstances beyond Muskâs control. They argue that such âdrastic actionâ by the SEC would be inappropriate, noting that Musk and his companies have cooperated with multiple ongoing SEC investigations.
The potential consequences for Musk are significant. Legal experts suggest that if found in contempt of court, Musk could face civil penalties, further court orders, or even arrest if he persistently defies legal mandates. While arrest is typically a last resort, the court might consider this step if Muskâs actions are deemed sufficiently serious.
This SEC investigation is not Muskâs only legal challenge. He faces scrutiny in the United States and internationally, including issues related to content moderation on X.
In a separate civil lawsuit, the Oklahoma Firefighters Pension and Retirement System has accused Musk of deliberately concealing his progressive investments in Twitter and his intent to buy the company.
The SECâs current focus is on whether Musk or his associates committed securities fraud in 2022 as he sold Tesla shares and increased his stake in Twitter. The agency is particularly interested in Muskâs public statements and disclosures during this period.
Despite repeated clashes with regulators, Musk has consistently criticized the SECâs actions, accusing the agency of unfair targeting and harassment. This ongoing conflict has raised questions about the balance between regulatory oversight and entrepreneurial freedom in the tech industry.
The SEC has rescheduled Muskâs deposition for early October at an SEC office. However, the agency expresses concern that without further court action, nothing prevents Musk from failing to appear again.
The post SEC Escalates Legal Action Against Elon Musk Over Twitter Acquisition Probe appeared first on Blockonomi.