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The US securities regulator is taking Elon Musk to court over his refusal to testify in an investigation into his purchases of Twitter stock and his statements surrounding the $44bn takeover of the social media platform.
In a filing in California federal court on Thursday, the Securities and Exchange Commission said it was conducting an “ongoing non-public investigation” into whether Musk had “violated various provisions of the federal securities laws” in connection with “his purchases of Twitter stock” and “his 2022 statements and SEC filings relating to Twitter”.
The SEC said he failed to testify on September 15, as required by a subpoena it had issued. It asked the court to compel him to appear, “in the face of Musk’s blatant refusal to comply”.
Alex Spiro, an attorney for Musk, said: “The SEC has already taken Mr Musk’s testimony multiple times in this misguided investigation — enough is enough.”
Before making his bid for the company at $54.20 a share in October last year, Musk accumulated a 9.2 per cent stake in Twitter, which has since been renamed X, in a series of share purchases that began as early as January. That was above the 5 per cent threshold that triggers disclosure requirements.
In April, the SEC sent a letter to Musk asking him why he did not appear to have made the appropriate filing by a late March deadline and why he had initially indicated that he was going to be a passive investor.
In July 2022, regulatory filings showed the SEC was also examining a tweet from May that year in which he said he could “not move forward” with the deal, citing concerns over bots on the platform.
SEC officials asked why the billionaire Tesla chief executive had not formally notified investors of the “apparent material change”. Musk’s lawyers responded that they did not believe he had to. Musk later closed the deal following several months of legal battle with Twitter over his intention to pull out.
Musk has clashed repeatedly with the regulator. He was sued for tweeting in 2018 that he had “funding secured” to take Tesla, the electric-car maker, private, and later settled with the SEC. He has butted heads with the regulator since over the terms of that agreement.
According to the SEC filing on Thursday, the regulator began its probe in April 2022 and has received thousands of documents from third parties as part of its inquiries, including “hundreds” from Musk himself. The billionaire also testified twice in July 2022, it said.
The filing alleged Musk initially agreed to testify an additional time in the investigation, but then notified SEC staff two days before his planned appearance that he would not, raising what the regulator described as “several spurious objections, including an objection to San Francisco as an appropriate testimony location”.
Among these, Musk accused the regulator of trying to use its subpoena powers to “harass him”, according to the filings, and claimed that a recently-published biography of him by Walter Isaacson contained potentially relevant information, meaning he did not need to appear.
He also refused to meet in Texas, as well as alternate dates in October and November, the filing said.
