Elon Musk, the enigmatic owner of X and CEO of various ventures, finds himself once more entangled with the U.S. Securities and Exchange Commission (SEC). The regulatory body, which had been probing Musk’s activities on Twitter, has initiated legal action against him after he failed to attend a previously scheduled testimony, as reported by The Wall Street Journal.
The SEC’s Ongoing Investigation
The SEC’s investigation traces its origins back to 2022 when it launched a probe into Musk’s delayed disclosure of his ownership stake in Twitter. At that time, Twitter was a publicly-traded company, and U.S. securities law mandates timely disclosure of such holdings. Musk’s delay in filing the required paperwork, a mere 10 days late, could have potentially netted him as much as $156 million. This delay also made him the subject of a class-action lawsuit filed by former Twitter shareholders.
Missed Testimony and Blanket Refusal
Musk was originally scheduled to provide testimony as part of the SEC’s investigation last month in San Francisco, according to The Wall Street Journal. However, he did not appear at the designated meeting, and later, he issued a “blanket refusal to appear for testimony” when the SEC attempted to reschedule. Consequently, the SEC is now seeking a court order from a San Francisco federal court to compel Musk to comply with its subpoena.
A History of SEC Encounters
Elon Musk has had prior encounters with the SEC, often landing on the wrong side of regulatory scrutiny, despite his occasional mockery of the agency. Most notably, in 2018, he faced charges of securities fraud over a tweet in which he claimed to have “funding secured” to take Tesla private. This infamous tweet led to a settlement with the SEC, wherein Musk agreed to pay a $20 million fine and relinquish his position as chairman of Tesla’s board.
However, an aspect of that settlement continues to be a point of contention. It involves a provision requiring a so-called “Twitter-sitter” to pre-approve certain Tesla-related tweets made by Musk, a requirement he is currently disputing.
