The U.S. Securities and Exchange Commission (SEC) is suing Elon Musk. They’ve taken this step because Musk, recognised as the richest person globally, refused to help with their probe into his Twitter buyout. The SEC wants him to provide further testimony about this purchase.
Elon Musk had previously agreed to attend a session on September 15. But, just two days before the session, he raised objections, suggesting the SEC was “harassing” him.
Twitter Purchase Under Scrutiny
Elon Musk’s £35 billion takeover of Twitter has attracted the attention of the SEC. They are probing if his stock purchases in 2022 and statements about the investment violated securities laws.
Musk had earlier revealed a large minority stake in Twitter in April 2022. He initially presented himself as a passive investor, indicating he didn’t want to control Twitter or affect its management decisions. But by late October 2022, he announced his intent to buy the company for $44 billion. He even tried to back out of the agreement, claiming Twitter hadn’t fully reported the extent of bot activity. But after a legal tussle, Musk finalised the Twitter acquisition.
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Past Tensions Between Musk and SEC
This isn’t the first time Musk has clashed with the SEC. In 2018, they charged him with misleading investors. This followed a Tweet where he claimed he had funding to take Tesla, his electric car company, private. To settle the matter, Musk agreed to step down as the firm’s chairman and accepted limitations on his social media comments about Tesla. He has since gone to court several times, trying to remove these restrictions.
Elon Musk once publicly admitted he had “no respect” for the SEC, further highlighting their strained relationship.
Lawyers Speak Out
Alex Spiro, representing Musk, stated, “The SEC has already taken Mr Musk’s testimony multiple times in this misguided investigation – enough is enough.” On the other hand, the SEC defended its actions, mentioning it is gathering information “relevant to its legitimate and lawful investigation.”
It wasn’t just the purchase that raised eyebrows. The SEC also questioned Musk’s disclosure of his Twitter stake and if he provided the necessary documents. They expressed concerns about why Musk initially represented himself as a passive investor and questioned a tweet where he seemed to backtrack on the deal. They wanted to know why he hadn’t officially informed investors of such a significant change.
With the legal proceedings underway, the world watches closely. Elon Musk is a well-known name in the business world, so people across the globe will be watching his legal issues. We’ll see how the court handles this new event.