Elon Musk, CEO of Tesla and SpaceX, is being ordered to testify before the Securities and Exchange Commission during its probe of his $44 billion takeover of Twitter (rebranded X by him), after refusing an interview in September. The SEC filed suit after he did not show up as scheduled.
The court issued a subpoena and allowed Musk and SEC one week to arrange for his testimony.
Judge Rejects Musk’s Arguments That SEC Has No Authority to Issue Subpoenas
Following up on his tentative ruling from December, a federal judge is compelling Elon to comply with a subpoena from the Securities and Exchange Commission in its investigation of his Twitter takeover. The agency wants him to answer questions regarding his late disclosure of stake in Twitter rebranded as X and what statements were implied from those disclosures.
In October, the Securities and Exchange Commission sued Elon Musk – also serving as CEO of Tesla and SpaceX – in an attempt to force him into an interview after he refused to attend a scheduled one in September. Regulators want to determine whether Musk violated any laws when filing paperwork related to his purchases of Twitter stock, including any statements regarding them which might have been misleading.
US Magistrate Judge Laurel Beeler dismissed allegations from Musk’s legal team that SEC officials don’t possess the power to issue subpoenas, instructing both sides to meet within one week to arrange a date and place for an interview with her.
Judge Gives Musk a Week to Work Out a Time and Place for Testimony
Elon Musk, CEO of Tesla and SpaceX, has one week to arrange his testimony in response to a subpoena issued by the Securities Exchange Commission (SEC) regarding his Twitter takeover. U.S. Magistrate Judge Laurel Beeler upheld this order against Musk after he unsuccessfully sought an exemption.
The SEC is investigating whether he and others engaged in securities fraud when purchasing Twitter stock and building up stakes prior to its leveraged buyout by Facebook. They want to assess whether these purchases complied with disclosure requirements as well as his statements surrounding the acquisition were accurate.
This case recalls another one involving Tesla from 2018, in which the SEC brought suit after Elon Musk said “funding secured” in reference to taking it private. After reaching a settlement agreement in that instance, Musk agreed that all his tweets regarding Tesla be reviewed by an attorney prior to being posted online.
Judge Rejects Musk’s Arguments That SEC Has Leaked Information to the Media
Reuters reports that the judge “emphatically dismissed” arguments by Musk’s attorneys. She instructed the SEC and him to negotiate an appointment within one week for one more four-hour deposition session, failing which she will issue an order compelling his attendance at this year’s testifying session.
US Magistrate Judge Laurel Beeler previously took a strong stance against him when she sided with regulators back in December, ruling in favor of them in this dispute dating back to his tweet in 2018 declaring funding secured when trying to take Tesla private. That move resulted in regulatory action from US financial watchdog and since has escalated his dispute with them further.
Alex Spiro argued the SEC was harassing and breaching an agreement he signed last year, yet the judge upheld their subpoena as clear and seeking relevant information, ruling that deposition will not be unduly burdensome.
Judge Rejects Musk’s Arguments That SEC Has Been Harassing Him
Musk’s lawyers alleged that the regulator’s pursuit of their client amounted to harassment, with them alleging the agency used its settlement with Tesla from last year and “near-limitless resources” to curb Musk’s speech.
The regulator is currently looking into whether Elon Musk violated securities laws when he purchased Twitter for $44 billion and converted it to private ownership under his brand new name, X. They plan to interview him regarding any stock purchases, tweets or public statements made prior to closing his deal.
So far, Elon Musk has testified before the Securities and Exchange Commission in two half-day sessions and been ordered to appear for another interview, yet is refusing. His attorneys claim he cannot accommodate them due to them interfering with running Tesla and his other businesses; as a result they’re hoping a judge can overturn this order; in December the judge gave them two weeks to negotiate an interview date; her order formalizes her tentative ruling from then.
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