Elon Musk Faces SEC Sanctions Over Missed Testimony in Twitter Acquisition Case

Elon Musk is under scrutiny by the U.S. Securities and Exchange Commission (SEC) for his failure to attend a court-ordered deposition concerning his $44 billion purchase of Twitter.

On Friday, the SEC announced its intention to seek sanctions against Musk after he canceled his deposition just hours before it was scheduled on September 10.

According to a filing in a San Francisco federal court, the SEC plans to request an order requiring Musk to explain why he should not be held in civil contempt. The missed deposition violated a May 31 court order that had compelled his testimony.

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Musk’s Absence and the SEC's Reaction

Musk, who was overseeing SpaceX’s Polaris Dawn mission at the time, claimed his presence in Florida was necessary for the astronauts' safety. However, the SEC countered that Musk’s involvement in the launch would have been scheduled well in advance, dismissing his absence as an excuse for “gamesmanship.”

The agency is calling for an end to what it sees as Musk’s delay tactics.

Robin Andrews, the SEC’s attorney, argued that Musk’s reasoning for skipping the deposition "smacks of gamesmanship." Musk’s legal team, led by Alex Spiro, described the SEC’s move as “drastic” and claimed the testimony was simply rescheduled for October 3, assuring that Musk will attend this time.

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The SEC’s Investigation into Musk’s Stock Disclosures

The SEC’s broader investigation focuses on whether Musk violated securities laws when he delayed disclosing his significant stake in Twitter in 2022. Securities regulations require public disclosure when an investor owns 5% of a company, but Musk waited to reveal his 9.2% stake, prompting accusations that shareholders were misled. Musk has since called the delay a “mistake.”

This case marks another chapter in Musk’s ongoing clashes with the SEC, including his 2018 settlement over tweets about taking Tesla private, which resulted in a $20 million fine and his removal as Tesla’s chairman.

Meanwhile, the SEC itself faces mounting criticism for its approach to regulating the cryptocurrency industry, with opponents accusing the agency of pursuing enforcement actions without providing clear guidelines.

A coalition of U.S. states has recently challenged the SEC’s regulation of the crypto market, further intensifying debates about the agency’s practices.

As this situation unfolds, Musk's legal battles continue to make headlines, reflecting his contentious relationship with U.S. regulators.

"It is not the strength of the body that counts, but the strength of the spirit." – J.R.R. Tolkien