SEC aims to punish Elon Musk for avoiding Twitter takeover testimony

The Securities and Exchange Commission wants sanctions against tech billionaire Elon Musk because he failed to appear for a scheduled testimony related to his buying Twitter, the agency said in a court filing Friday. 

The SEC has been investigating Mr. Musk for his 2022 acquisition of the social media platform, now called X, over whether he or anyone involved in the deal committed securities fraud or made misleading statements linked to the deal.

A court ordered Mr. Musk to appear for testimony with SEC attorneys on Sept. 10 in Los Angeles, but then his lawyers notified the agency’s legal team that Mr. Musk had to miss the testimony in favor of the launch of a spaceflight mission by his other company, SpaceX. 

While both parties negotiated a new date for his testimony set for early October, the agency argued that Mr. Musk violated a court order that required he seek written consent from the SEC or the court to miss the hearing. 

The SEC contended that Mr. Musk’s move “smacked of gamesmanship.”

“As the company’s chief technical officer, Musk surely was already aware by then that SpaceX was targeting the morning of his SEC testimony for the launch,” the SEC said in the court filing. “Despite this advance knowledge, Musk did not notify the SEC of his intent to attend the launch until three hours before his testimony was to begin and after the SEC spent thousands of dollars to fly three attorneys to Los Angeles.”

The agency asked the court to hold Mr. Musk in civil contempt for skipping the testimony and requested that the court impose “meaningful conditional relief” if Mr. Musk doesn’t appear in October. 

In response to the SEC filing, Mr. Musk’s legal team wrote that the “court’s intervention is not necessary, as the parties have already agreed to a new testimony date,” and noted that the billionaire was already under an order to appear before the court “absent an emergency” that he “did not create and could not avoid.”