Billionaire and entrepreneur Elon Musk is currently under investigation by the US Securities and Exchange Commission (SEC) in connection with his high-profile $44 billion acquisition of Twitter, a popular social media platform. This investigation came to light on Thursday, shedding new light on Musk’s actions surrounding the deal.

The primary focus of the SEC’s investigation revolves around whether Musk violated federal securities laws during the year 2022 when he purchased Twitter stock, later rebranded as “X,” and the statements and SEC filings he made related to this significant acquisition.

In March 2022, Musk acquired a substantial 9.2% stake in Twitter, subsequently emerging as the majority shareholder of the company. Interestingly, the purchase was not disclosed in an SEC filing until the following month, leading to legal action by Twitter shareholders who alleged misconduct. However, their lawsuit was ultimately dismissed. As pressure mounted with a trial looming that aimed to compel Musk to complete the deal, he eventually purchased the remaining Twitter stock for a staggering $44 billion, officially taking control of the company in October 2022.

The SEC’s investigation was thrust into the spotlight when the agency filed a lawsuit on Thursday, demanding that Musk testify as part of their ongoing inquiry. Musk had initially agreed to cooperate but later backtracked on his commitment.

According to the SEC, they issued a subpoena to Musk in May 2023, compelling him to provide testimony at their office located in San Francisco. Musk had previously agreed to appear for questioning just a month ago. However, a mere two days before the scheduled testimony, Musk raised a series of objections, ultimately refusing to participate. Furthermore, he rejected the SEC’s proposals to conduct the deposition in Texas, his legal place of residence, during either October or November.

Among Musk’s objections was his claim that the SEC was attempting to “harass” him and the need for his legal counsel to review potentially relevant material contained in a recently published biography about him.

Alex Spiro, an attorney representing Musk, expressed frustration, stating, “The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation – enough is enough.“

Notably, shortly after the revelation of his Twitter stake, Musk initially accepted and then declined a board seat at the company. This decision would have prohibited him from acquiring additional stock. He later sought to backtrack on the entire deal, citing concerns that Twitter had not been transparent about bot activity on its platform.

In response to these developments, the SEC asserted that it is seeking Musk’s testimony to obtain information that is not already within their possession but is deemed relevant to their legitimate and lawful investigation.

This latest filing underscores the ongoing conflict between Elon Musk and the SEC, which traces its roots back to Musk’s 2018 tweet in which he claimed he intended to take Tesla private with secured funding. The SEC imposed a $20 million fine on Musk for misleading investors and forced him to step down as Tesla’s chairman, a penalty Musk later referred to as “worth it” in subsequent tweets. Since then, Musk has repeatedly criticized the SEC, which has initiated multiple investigations into his actions over the years.

In response to these recent developments, Musk took to his platform, X, to call for a comprehensive overhaul of regulatory agencies and the establishment of a commission to address instances where regulatory power has been abused for personal or political gain.

Source: Reuters

Related /

• The dark side of Elon Musk as he executes a shocking plan to change Twitter/X’s destiny overnight
• Is Elon Musk’s Twitter/X the first of many subscription-based social networks?
• Twitter/X CEO Linda Yaccarino’s struggles in an unsettling interview
• Twitter/X CEO Linda Yaccarino anticipates profitability by 2024