The United States Securities and Exchange Commission (SEC) has taken legal action to compel Elon Musk’s testimony in an ongoing investigation linked to his acquisition of X, formerly known as Twitter, in October 2022.
The SEC has initiated this action to probe potential violations of various provisions of U.S. federal securities laws in connection with the $44 billion transaction that transformed the once publicly-traded Twitter into a private entity.
According to a statement released by the SEC, Musk’s statements and filings related to Twitter are also under investigation, but at this stage, no specific individual or entity has been identified as a violator of federal securities laws.
The SEC has stated that Musk’s testimony is crucial to providing additional information that is pertinent to its ongoing investigation but not currently available to the regulatory body.
Despite Elon Musk’s prior assurance that he would make himself available for testimony in September 2023, the SEC claims that its efforts to secure his cooperation have been unsuccessful.
The SEC alleges, “According to the filing, Musk failed to appear for testimony as required by the investigative subpoena served by the SEC, despite: (1) agreeing to appear for testimony on a mutually agreed upon date in September 2023.”
The regulatory agency asserts that Musk was served with the subpoena in May 2023, which mandated his appearance for testimony at the SEC’s San Francisco regional office on the previously agreed-upon date.
However, Musk did not raise any objections to the subpoena until just two days before his scheduled testimony in September 2023.
The SEC contends that Musk’s objections were unfounded and, if a person or entity refuses to comply with a subpoena issued by SEC enforcement staff pursuant to a formal order of investigation, the Commission may file a subpoena enforcement action in federal district court seeking an order compelling compliance.