The Securities and Exchange Commission has filed a lawsuit in federal court to compel Elon Musk to testify as part of the agency's investigation into his accumulation of Twitter stock in 2022.
The SEC on Oct. 5 sued Musk, who completed a $44 billion purchase of Twitter, now X, in October 2022, in U.S. District Court in San Francisco.
The agency's ongoing investigation into Musk centers around company stock purchases the billionaire made prior to purchasing Twitter. In March 2022, Musk purchased 9.2% of Twitter stock, but he did not disclose the purchase until 21 days later in an April 4 filing. When 5% of a publicly traded company is purchased, the buyer has 10 days to disclose the trade under federal securities laws.
The SEC served Musk a subpoena about the matter in May, and the two parties mutually agreed that Musk would testify in September, according to the SEC lawsuit. But two days prior to the agreed upon date, Musk notified the SEC that he would not appear. Musk "attempted to justify his refusal to comply with the subpoena by raising, for the first time, several spurious objections," according to the SEC filing.
The SEC said it needs Musk's testimony to obtain information that is "relevant to its legitimate and lawful investigation."
Musk responded to a post on X announcing the lawsuit and said, "A comprehensive overhaul of these agencies is sorely needed, along with a commission to take punitive action against those individuals who have abused their regulatory power for personal and political gain. Can't wait for this to happen."
The SEC is seeking an order from the court directing Musk to comply with the subpoena and requested the court to hold a hearing Nov. 9 on the matter. The agency added that staff is continuing its fact-finding investigation and, to date, has not concluded that any individual or entity has violated the federal securities laws.