Anamika Dey, editor
Brief news
- The SEC is seeking sanctions against Elon Musk for failing to comply with a court order to participate in a deposition related to his Twitter acquisition investigation.
- Musk has missed two deposition appearances, prompting the SEC to consider holding him in civil contempt.
- A separate lawsuit claims Musk concealed his Twitter investments, impacting shareholder decisions.
Detailed news
Elon Musk has been requested by the Securities and Exchange Commission to be sanctioned by a federal judge if he persistently fails to comply with the court’s order to submit to a deposition in connection with an investigation into his acquisition of Twitter in 2022.
The SEC has been conducting an inquiry into whether Musk or any individual associated with him committed securities fraud in 2022. This occurred as the Tesla CEO sold shares in his automaker and increased his stake in Twitter in anticipation of his negotiated buyout of the company now known as X.
Musk was ordered by the court in May to participate in a deposition conducted by financial regulators concerning the Twitter transaction.
“Musk has now failed to appear before the SEC twice: first in September 2023, in defiance of a lawful administrative subpoena, and most recently last week, in defiance of a clear court order,” stated SEC attorney Robin Andrews in the Friday filing.
According to the filing, Andrews requested that the judge consider sanctions in the event that Musk delays further.
Andrews wrote, “The Court must explicitly state that Musk’s delay tactics and gamesmanship must be discontinued.”
The SEC intends to request that the court hold Musk in “civil contempt” for canceling a deposition on Sept. 10, as indicated in a footnote in the filing. Musk provided the agency with only a few hours’ notice that he would not be there. According to the SEC, Musk’s cancellation resulted in a loss of time and money for the agency, as personnel were dispatched to Los Angeles to depose him, and he failed to attend the investigative interview.
The SEC office has rescheduled Musk’s deposition in the investigation for early October, according to the filing.
Andrews wrote, “If the Court does not take any further action, Musk will continue to fail to appear for that date.”
Alex Spiro, a partner at Quinn Emanuel in New York, Musk’s counsel, responded that “such drastic action would be inappropriate.” He also stated that the SEC and Musk had agreed that rescheduling would be permissible in the event of an emergency.
Furthermore, Spiro stated that Musk and his organizations have “cooperated and are currently cooperating with the SEC in numerous other ongoing investigations.”
In a separate civil lawsuit related to the same Twitter transaction, the Oklahoma Firefighters Pension and Retirement System has filed a lawsuit against Musk in a federal court in New York. The lawsuit accuses Musk of intentionally concealing his progressive investments in Twitter and of intending to acquire the company.
The pension fund’s attorneys contend that Musk’s failure to disclose his investments in and intentions to acquire Twitter had a detrimental impact on the decisions of other shareholders.
A correspondence between an unnamed individual at Morgan Stanley and the executive who administers Musk’s money, Jared Birchall, was discovered in the New York case. In February 2022, the Morgan Stanley contact stated in the messages that Musk’s Twitter stock-buying strategy was closely adhered to.
The individual at Morgan Stanley wrote, “No one knows what is happening and why, except for you and me.” “No one, not even compliance.”
Source : CNBC News
