Elon Musk, the tech mogul behind Tesla and SpaceX, has been ordered by a U.S. judge to comply with a subpoena from the Securities and Exchange Commission (SEC) regarding his acquisition of the social media platform Twitter, now known as X. This development is part of an ongoing SEC inquiry into Musk’s activities surrounding his purchase of Twitter, focusing on potential securities fraud linked to his stock transactions and accumulation of shares before the platform’s buyout.
Elon Musk’s acquisition of X and SEC scrutiny
In a recent court filing, Judge Laurel Beeler ruled in favor of the SEC, affirming the regulatory body’s right to enforce the subpoena against Elon Musk. The decision underscores the relevance and validity of the SEC’s request for information from Musk, who must now provide testimony for the investigation. The ruling mandates that Musk and the SEC must coordinate to schedule a date and location for his deposition within the next week.
This legal move comes after the SEC initiated action against Elon Musk for not complying with a previously issued subpoena in May last year. The agency has been scrutinizing Musk’s actions in 2022, particularly his method of acquiring a significant stake in Twitter before its leveraged buyout, to determine if there was any securities fraud involved.
Elon Musk completed the acquisition of Twitter in October 2022, purchasing the company for approximately $44 billion. Following the acquisition, Musk embarked on a mission to transform the social media platform, introducing several new features to turn it into a comprehensive “everything app.” Among the anticipated developments under Musk’s leadership is the introduction of a peer-to-peer (P2P) payment system, with details on the involvement of cryptocurrency in this venture still pending.
The SEC’s investigation into Musk’s dealings is not solely focused on the acquisition process but extends to his stock purchases and the accumulation of Twitter shares before the official buyout. The regulatory body has expressed the need for Musk’s testimony to gather essential information pertinent to its investigation to uncover any unlawful activities or securities fraud.
Musk responds to SEC actions
In response to the SEC’s subpoena, Musk has publicly criticized the regulatory agency, labeling the subpoena as harassment and calling for a significant overhaul of regulatory bodies. He has voiced his concerns over what he perceives as the misuse of regulatory power for personal and political gain, advocating for punitive action against those who abuse their positions.
Musk’s comments reflect his broader dissatisfaction with regulatory oversight, a sentiment he has expressed in various contexts related to his business ventures. Despite his criticisms, the court’s recent ruling emphasizes the legal obligation Musk has to comply with the SEC’s investigative efforts, setting the stage for his forthcoming testimony.
As the situation unfolds, the tech community and investors keenly watch the developments surrounding Musk’s SEC testimony. The outcome of this inquiry could have significant implications for Musk’s future business endeavors and the regulatory landscape for tech entrepreneurs.