According to the SEC, Musk failed to appear for scheduled testimony in San Francisco last month that would have aided the regulator’s probe into his purchase of Twitter stock and public statements about the company in 2022.
The SEC is examining if false or misleading information was shared by Musk that potentially manipulated Twitter’s share price and misled investors leading up to and following his tumultuous takeover of the social media platform in October 2022.
By taking the extraordinary step of suing in federal court, the SEC is attempting to force the billionaire Tesla and SpaceX CEO to answer key questions about the Twitter deal under oath. The agency requires Musk’s testimony to make a determination regarding potential securities regulation breaches during the blockbuster acquisition.
Musk enacted major changes after assuming control of Twitter, including reversing lifetime bans and laying off about 75% of the company’s employees. By July 2023, with Musk having stepped down as CEO, Twitter was rebranding itself as “X” as the company’s future direction remained unclear.
The SEC’s lawsuit represents the latest chapter in the ongoing legal saga surrounding Musk’s chaotic takeover of Twitter last year. Musk had tried to back out of the deal before being compelled to follow through on his original offer. With the deal now completed, investigators are seeking answers directly from Musk about potential misconduct leading up to and during the acquisition process.
