US regulator to probe Elon Musk's Twitter $44 billion takeover

photo: Reuters

The U.S. Securities and Exchange Commission has initiated an investigation into Elon Musk, the wealthiest individual globally, regarding his acquisition of Twitter, a social media powerhouse valued at $44 billion. This development surfaced through a court filing on Thursday, where the SEC requested Musk's testimony.

This investigation marks a significant escalation in the ongoing conflict between the SEC and Elon Musk. It revolves around the question of whether Musk violated federal securities laws in 2022 when he purchased shares in Twitter, which he subsequently rebranded as "X." The inquiry also encompasses an examination of statements and SEC filings made by Musk in connection with this transaction.

In May 2023, the SEC issued a subpoena to Elon Musk, mandating him to provide testimony at the SEC's San Francisco office. Initially, Musk had agreed to appear on September 15. However, just two days before the scheduled testimony, Musk raised what the SEC described as "several baseless objections" and informed the SEC that he would not attend. Furthermore, Musk declined the SEC's proposals to reschedule the deposition for October or November in Texas.

Among Musk's objections was his claim that the SEC was attempting to "harass" him. He also argued that his legal counsel needed time to review potentially pertinent material contained in a biography of Musk that had been published the previous month, as per the SEC's account.

As per the court filing, Elon Musk has already supplied the SEC with documents pertaining to the ongoing investigation and had previously given testimony via video conference in July of the preceding year.

In response, Alex Spiro, an attorney representing Musk, stated, "The SEC has already taken Mr. Musk's testimony multiple times in this misguided investigation - enough is enough."

The SEC, in a press release, stated that it is pursuing Musk's testimony to acquire information that is not yet in its possession but is relevant to its lawful and legitimate investigation. An SEC spokesperson declined to provide any additional comments on the matter.

The court filing on Thursday represents the most recent clash in the ongoing feud between Elon Musk and the SEC. This feud dates back to 2018 when Musk tweeted about his intention to take his electric car company, Tesla, private, claiming he had secured funding for it. Subsequently, Musk has consistently criticized the SEC, and as a result, the SEC has initiated several investigations into Musk's activities over the years.