SEC Threatens Elon Musk with Sanctions Over Missed Court Appearance
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Elon Musk, the CEO of X and several other companies prefixed with X, is facing potential sanctions from the U.S. Securities and Exchange Commission (SEC) after failing to appear in court for a testimony related to his acquisition of Twitter.
In a filing submitted today, the SEC stated its intention to seek sanctions against Musk following his absence from a court-ordered appearance at a Los Angeles courthouse on September 10. The SEC noted that Musk informed the commission only three hours prior to his scheduled testimony that he would not be attending.
The filing emphasized the need for the court to send a clear message that Musk’s gamesmanship and delay tactics must cease.
On the day of the missed appearance, Musk was instead overseeing the launch of Polaris Dawn, a spacecraft developed by his space exploration company, SpaceX.
The SEC had offered to reschedule the hearing to September 11, but Musk’s attorney declined, only agreeing to court dates in October. In response, the SEC is seeking meaningful conditional relief and has indicated it will file a motion to recoup its travel costs, which included flying three attorneys to Los Angeles for the canceled testimony.
The court-mandated appearance stems from an SEC investigation into whether Musk adhered to legal requirements when disclosing his purchases of Twitter stock prior to acquiring the company for $44 billion in 2022. The SEC also alleges that Musk’s statements regarding the deal were misleading and that he delayed the disclosure of his Twitter share purchases by at least 10 days.
This probe is the second instance in recent years where Musk has faced scrutiny from the SEC. In 2018, the agency ordered Musk to step down as Tesla’s chairman and pay a $40 million penalty over tweets that the SEC deemed to be market-manipulating. Additionally, the SEC has investigated Musk and Tesla over claims about Tesla vehicles’ full self-driving capabilities and the use of company funds for a secret glass house project.
For the full filing, see the document linked below.
Updated 9/20 at 5:48 p.m. Pacific: We originally reported that Musk failed to appear in a San Francisco courtroom. The courtroom was in fact in Los Angeles; we’ve made the correction and regret the error.
JOINT STATEMENT REGARDING RESPONDENT’S FAILURE TO APPEAR FOR COURT-ORDERED TESTIMONY
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