US regulators seek to compel Elon Musk to testify in their investigation of his Twitter acquisition

SAN FRANCISCO (AP) — The Securities and Alternate Fee mentioned Thursday it’s looking for a court docket order that will compel Elon Musk to testify as a part of an investigation into his buy of Twitter, now known as X.

The SEC mentioned in a submitting in a San Francisco federal court docket that Musk failed to look for testimony on Sept. 15 regardless of an investigative subpoena served by the SEC and having raised no objections on the time it was served.

However “two days earlier than his scheduled testimony, Musk abruptly notified the SEC employees that he wouldn’t seem,” mentioned the company’s submitting. “Musk tried to justify his refusal to adjust to the subpoena by elevating, for the primary time, a number of spurious objections, together with an objection to San Francisco as an applicable testimony location.”

X, which relies in San Francisco, didn’t instantly return a request for remark.

The SEC mentioned it has been conducting a fact-finding investigation involving the interval earlier than Musk’s takeover final 12 months when Twitter was nonetheless a publicly traded firm. The company mentioned it has not concluded that anybody has violated federal securities legal guidelines.

The Tesla CEO closed his $44 billion settlement to purchase Twitter and take it personal in October 2022, after a months-long authorized battle with the social media firm’s earlier management.

After Musk signed a deal to amass Twitter in April 2022, he tried to again out of it, main the corporate to sue him to pressure him to undergo with the acquisition.

The SEC mentioned that beginning in April 2022, it licensed an investigation into whether or not any securities legal guidelines had been damaged in reference to Musk’s purchases of Twitter inventory and his statements and SEC filings associated to the corporate.

A lawsuit filed that very same month by Twitter shareholders in New York alleged that the billionaire illegally delayed disclosing his stake within the social media firm so he may purchase extra shares at decrease costs.

That criticism centered round whether or not Musk violated a regulatory deadline to disclose he had gathered a stake of at the least 5%. The lawsuit alleged that Musk’s actions damage much less rich buyers who bought shares within the firm within the almost two weeks earlier than Musk acknowledged holding a significant stake.

The SEC’s court docket filings don’t element the specifics of what its investigation is about, however argue that the company is answerable for defending buyers and has broad authority to conduct investigations and that Musk has no foundation to refuse to conform.

The SEC mentioned Musk objected to testifying in San Francisco as a result of he doesn’t reside there, so the fee mentioned it provided to do it at any of its 11 workplaces, together with one in Fort Price, Texas, nearer to the place Musk lives. The SEC mentioned on Sept. 24, Musk’s legal professionals responded by saying Musk wouldn’t seem for testimony in any location.