US Financial Regulators Sue Elon Musk Over Twitter Purchase Investigation

Financial regulators in the United States have taken legal action against Elon Musk following his refusal to cooperate with their investigation into his acquisition of Twitter, now known as X. The Securities and Exchange Commission (SEC) has filed a lawsuit in a federal court, seeking an order to compel Musk to participate in a third round of testimony regarding the transaction. This legal move comes in response to a letter from Musk’s lawyer, in which he stated that Musk would not comply with the SEC’s request, accusing the commission of “harassment.”

The ongoing dispute between the SEC and Mr. Musk has been fraught with tensions, with Musk once publicly stating that he had “no respect” for the regulatory body. The SEC initiated its investigation into Musk’s $44 billion purchase of X in the previous year. The investigation centers on whether his stock purchases in 2022, prior to acquiring the company outright, and his statements about these investments violated securities laws.

Musk had already provided two sessions of testimony via video conference in July after being subpoenaed by the SEC. The commission now deems an additional session necessary due to the significant volume of documents received after the initial testimonies. A letter from Musk’s attorney, included as part of the exhibit, questions the need for further testimony, stating that it is “unclear why the staff requires further time diverting Mr. Musk from his significant obligations to companies and shareholders. Enough is enough.”

This isn’t the first time Musk has clashed with the SEC. In 2018, he faced charges of defrauding investors for claiming in a tweet that he had “funding secured” to take Tesla, the electric car company he leads, private. He later settled these charges by stepping down as chairman of the firm’s board and accepting limitations on his social media communications about the company, known as a “Twitter sitter.” Musk has repeatedly sought to have these limitations removed through legal proceedings, including a recent attempt in February.

Separately, a judge in New York recently ruled that Musk must face a lawsuit from former Twitter investors who allege that he defrauded them by not promptly disclosing his share purchases. However, an insider trading claim against him was dismissed in this ruling.

This legal confrontation between Elon Musk and the SEC continues to draw attention as both parties remain firmly entrenched in their positions. It remains to be seen how this lawsuit will unfold and whether Musk will ultimately be compelled to testify in the SEC’s investigation.