Technology
Elon Musk Threatened with SEC Sanctions for Failure to Appear in Court
Elon Musk, CEO of X and other firms whose names include the letter “X,” found himself in the crosshairs of regulators after he failed to testify this month as a part of an investigation into Musk’s acquisition of Twitter.
In a document filed today, the U.S. Securities and Exchange Commission (SEC) said it intends to impose sanctions on Musk after he missed a court-ordered hearing in Los Angeles Superior Court on September 10. According to the document, Musk didn’t notify the SEC that he wouldn’t appear for the hearing until three hours before the hearing was set to begin.
“The court must make clear that Musk must stop his games and delaying tactics,” the letter reads.
According to the documents, Musk spent September 10 overseeing the launch of Polaris Dawn, a spacecraft manufactured by his space exploration company, SpaceX.
SEC counsel proposed rescheduling Musk’s hearing for the following day, September 11. However, Musk’s lawyer declined, agreeing only to an October hearing.
The SEC is searching for “significant contingent relief” if Musk fails to appear in court in October. The agency has also indicated it plans to file a motion for sanctions against Musk to get well travel expenses for the canceled testimony and other relief. (In the lawsuit, the SEC said it spent “thousands of dollars” to fly three attorneys to Los Angeles for the Sept. 10 hearing.)
Musk’s court-ordered appearance stems from an SEC investigation into whether the billionaire acted lawfully in disclosing his Twitter stock purchases ahead of his $44 billion acquisition of the corporate in 2022. The investigation can also be looking into whether Musk’s statements in regards to the transactions were misleading; the SEC alleges that Musk waited at the least 10 days too long to disclose that he was buying Twitter stock.
The investigation is the second time Musk has found himself under the SEC’s gun in recent years. In 2018, the agency ordered Musk to step down as Tesla CEO and pay $40 million for tweets about Tesla stock that the SEC found amounted to market manipulation. At the time, Musk called the fraud allegations “unjustified.”
The Securities and Exchange Commission (SEC) also investigated Musk and Tesla over claims about Tesla’s vehicles’ ability to achieve “full autonomous driving” in addition to Tesla’s use of company funds to construct a “glass house” for Musk.
The full text of the appliance will be read below.