As Elon Musk focuses on jamming a few more nails into the X (f.k.a. Twitter) coffin, the Securities and Exchange Commission has gone to the courts to compel him to finally testify as part of an ongoing investigation tied to his acquisition of the social media platform.
On Thursday, Oct. 5, the SEC sued Musk in California federal court after he failed to appear for testimony on Sept. 15 as required by an investigative subpoena served by the agency. As the suit notes, Musk missed the hearing despite agreeing to the Sept. 15 date back in May, when he was served; the SEC even noted that Musk raised “no objection to the subpoena at the time it was served or during the following months,” and that the agency accommodated Musk’s request for a last-minute date change.
“Instead, two days before his scheduled testimony, Musk abruptly notified the SEC staff that he would not appear,” the suit states. “Musk attempted to justify his refusal to comply with the subpoena by raising, for the first time, several spurious objections, including an objection to San Francisco as an appropriate testimony location.”
After Musk missed the Sept. 15 date, the SEC said it tried to reschedule, but these “good faith efforts were met with Musk’s blanket refusal to appear for testimony.” Furthermore, the SEC said Musk has accused the agency of “using its subpoena power to ‘harass’ him,” a claim the agency called “unsupported.”
The SEC also claimed Musk tried to use Walter Isaacson’s new biography of him as an excuse to skirt the subpoena. Musk allegedly said the biography contains “new information potentially relevant to this matter,” and that his legal team needs “time to review this material.” The SEC called the publication of the book “not a legitimate basis for Musk to avoid compliance with a lawfully issued subpoena. In any event, Musk’s initial refusal to comply with the subpoena has now presented his counsel with plenty of time to review the biography for any relevant information, and so his objection is now moot in addition to being legally insufficient from inception.”
Alex Spiro, a lawyer for Musk, told Rolling Stone, “The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation — enough is enough.”
The SEC is investigating whether Musk violated federal securities law during his acquisition of Twitter last year. Before announcing his $44 million bid for the company, Musk quietly bought up a ton of Twitter shares, accumulating a nine percent stake in the company. As The New York Times notes, SEC rules require investors who buy more than 5 percent of a company’s shares to disclose their stakes within 10 days of purchase; Musk allegedly missed this deadline, according to the SEC.