Washington: The U.S. Securities and Exchange Commission (SEC) announced on Friday its intention to seek sanctions against Elon Musk after he failed to appear for court-ordered testimony regarding the regulator’s investigation into his $44 billion acquisition of Twitter.
In a filing with the San Francisco federal court, the SEC said it would file a sanctions motion requesting an order to explain why Musk should not be held in civil contempt. The motion comes after Musk informed the court only three hours before the scheduled testimony on September 10 that he would not be attending.
Musk, CEO of Tesla and SpaceX, traveled to Cape Canaveral, Florida, on the day of his testimony to oversee SpaceX’s Polaris Dawn mission. However, the SEC argues that Musk, as SpaceX’s chief technical officer, was likely aware of the launch beforehand, noting that the company had discussed the mission two days earlier. The SEC claims Musk’s decision violated a May 31 court order compelling him to testify.
“Musk’s excuse itself smacks of gamesmanship,” SEC lawyer Robin Andrews wrote in the court filing. “The court must make clear that Musk’s gamesmanship and delay tactics must cease.”
Alex Spiro, Musk’s lawyer, argued that sanctions were “drastic” and unnecessary, claiming that Musk’s presence at the launch was crucial to astronaut safety and that his testimony has been rescheduled for October 3. Spiro stated Musk’s absence was due to an “emergency” and assured that it was unlikely to happen again.
While an SEC spokesperson declined to comment further, the agency’s court filing suggested concerns that Musk may not appear for the rescheduled October 3 testimony either.
Also Read | US to Send $375 Million in Arms to Ukraine as Winter Approaches
The SEC is investigating whether Musk violated securities laws in early 2022 when he began accumulating Twitter stock. Musk has faced criticism, including from Twitter shareholders, for waiting at least 10 days too long to disclose his stock purchases. Investors are required to disclose once they reach a 5% ownership stake in public companies. Musk eventually disclosed a 9.2% stake and shortly after made an offer to buy the entire company.
In July, Musk said he misunderstood SEC disclosure requirements, describing the delay as a “mistake” based on his understanding at the time.
Also Read | Over 100 Dead or Missing as Sinaloa Cartel War Intensifies in Mexico
The SEC first sued Musk last October after he missed a scheduled interview at its San Francisco office, part of a long-standing feud between Musk and the agency. Musk has accused the SEC of attempting to “harass” him through subpoenas. This follows his 2018 settlement with the SEC after he tweeted about taking Tesla private, which resulted in a $20 million fine and an agreement to have Tesla lawyers review some of his social media posts before publication. Musk also stepped down as Tesla’s chairman as part of the settlement.
