SEC seeks to force Elon Musk to testify in probe of Twitter stock purchases

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The US securities regulator is taking Elon Musk to court docket over his refusal to testify in an investigation into his purchases of Twitter stock and his statements surrounding the $44bn takeover of the social media platform.

In a submitting in California federal court docket on Thursday, the Securities and Exchange Commission stated it was conducting an “ongoing non-public investigation” into whether or not Musk had “violated various provisions of the federal securities laws” in reference to “his purchases of Twitter stock” and “his 2022 statements and SEC filings relating to Twitter”.

The SEC stated he failed to testify on September 15, as required by a subpoena it had issued. It requested the court docket to compel him to seem, “in the face of Musk’s blatant refusal to comply”.

Alex Spiro, an lawyer for Musk, stated: “The SEC has already taken Mr Musk’s testimony multiple times in this misguided investigation — enough is enough.”

Before making his bid for the corporate at $54.20 a share in October final yr, Musk amassed a 9.2 per cent stake in Twitter, which has since been renamed X, in a collection of share purchases that started as early as January. That was above the 5 per cent threshold that triggers disclosure necessities.

In April, the SEC despatched a letter to Musk asking him why he didn’t seem to have made the suitable submitting by a late March deadline and why he had initially indicated that he was going to be a passive investor.

In July 2022, regulatory filings confirmed the SEC was additionally inspecting a tweet from May that yr in which he stated he might “not move forward” with the deal, citing issues over bots on the platform.

SEC officers requested why the billionaire Tesla chief government had not formally notified buyers of the “apparent material change”. Musk’s legal professionals responded that they didn’t imagine he had to. Musk later closed the deal following a number of months of authorized battle with Twitter over his intention to pull out.

Musk has clashed repeatedly with the regulator. He was sued for tweeting in 2018 that he had “funding secured” to take Tesla, the electric-car maker, non-public, and later settled with the SEC. He has butted heads with the regulator since over the phrases of that settlement.

According to the SEC submitting on Thursday, the regulator started its probe in April 2022 and has obtained hundreds of paperwork from third events as half of its inquiries, together with “hundreds” from Musk himself. The billionaire additionally testified twice in July 2022, it stated.

The submitting alleged Musk initially agreed to testify a further time in the investigation, however then notified SEC employees two days earlier than his deliberate look that he wouldn’t, elevating what the regulator described as “several spurious objections, including an objection to San Francisco as an appropriate testimony location”.

Among these, Musk accused the regulator of attempting to use its subpoena powers to “harass him”, in accordance to the filings, and claimed {that a} recently-published biography of him by Walter Isaacson contained doubtlessly related data, that means he didn’t want to seem.

He additionally refused to meet in Texas, in addition to alternate dates in October and November, the submitting stated.

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