US SEC Intends to Seek Sanctions Against Elon Musk in Twitter Probe

The
U.S.
Securities
and
Exchange
Commission
said
on
Friday
it
intends
to
seek
sanctions
against

Elon
Musk
after
he
failed
to
appear
for
court-ordered
testimony
for
the
regulator’s
probe
into
his
$44
billion
takeover
of
Twitter.

In
a
filing
in
San
Francisco
federal
court,
the

SEC
said
the
sanctions
motion
would
seek
an
order
to
show
cause
for
why
Musk
should
not
be
held
in
civil
contempt
for
waiting
until
three
hours
before
the
scheduled
Sept.
10
testimony
to
advise
he
would
not
show
up.

Musk,
whose
businesses
include
electric
car
maker

Tesla
and
rocket
company

SpaceX
and
who
is
the
world’s
richest
person,
went
to
Florida’s
Cape
Canaveral
that
day
to
oversee
the
launch
of
SpaceX’s

Polaris
Dawn
mission.

But
the
SEC
said
that
as
SpaceX’s
chief
technical
officer,
Musk
“surely
was
already
aware”
of
the
planned
launch
because
the
company
had
discussed
it
two
days
earlier.
It
said
Musk’s
actions
violated
a
May
31
court
order
compelling
his
testimony.

“Musk’s
excuse
itself
smacks
of
gamesmanship,”
SEC
lawyer
Robin
Andrews
wrote.
“The
court
must
make
clear
that
Musk’s
gamesmanship
and
delay
tactics
must
cease.”

Alex
Spiro,
a
lawyer
for
Musk,
called
sanctions
“drastic”
and
unnecessary,
saying
Musk’s
absence
from
the
launch
could
have
endangered
astronauts’
lives,
and
that
his
testimony
has
been
rescheduled
for
Oct.
3.

Musk’s
failure
to
testify
on
Sept.
10
resulted
from
an
“emergency”
he
did
not
cause,
and
“there
is
no
reason
to
believe
such
an
emergency
will
reoccur,”
Spiro
wrote.

An
SEC
spokesperson
declined
to
comment,
though
the
regulator
said
in
the
court
filing
that
nothing
deters
Musk
from
failing
to
show
up
on
Oct.
3.

The
SEC
is
investigating
whether
Musk
violated
securities
laws
in
early
2022
when
he
started
accumulating

Twitter
stock.

Musk
has
been
criticized,
including
by
Twitter
shareholders,
for
waiting
at
least
10
days
too
long
to
disclose
he
was
buying
Twitter
shares.

Investors
must
disclose
when
they
reach
5%
ownership
of
public
companies.
Musk
eventually
disclosed
a
9.2%
Twitter
stake,
and
soon
thereafter
offered
to
buy
the
whole
company.

In
July,
Musk
said
he
misunderstood
SEC
disclosure
requirements,
and
that
“all
indications”
suggested
his
delay
was
a
“mistake.”

The
SEC
sued
last
October
after
he
missed
a
scheduled
interview
at
its
San
Francisco
office.

Musk
has
said
the
SEC
was
trying
to
“harass”
him
through
subpoenas.

He
has
long
feuded
with
the
SEC,
including
after
it
sued
him
in
2018
over
his
Twitter
posts
about
taking
Tesla
private.

Musk
settled
that
lawsuit
by
paying
a
$20
million
fine,
agreeing
to
have
Tesla
lawyers
review
some
posts
in
advance,
and
giving
up
his
role
as
Tesla’s
chairman.