Elon Musk, the CEO of Tesla, has agreed to testify in the Securities and Exchange Commission’s (SEC) investigation into his acquisition of social media platform Twitter, now known as X. In a court filing on May 30, it was revealed that Musk has waived his right to appeal a court order requiring him to comply with the SEC’s subpoena and sit for no more than five hours of questioning at one of the SEC’s offices.
The specifics of the testimony date have not been disclosed in the document due to confidentiality purposes. However, it was stated that the agreed-upon date and time can only be rescheduled with written consent from the SEC or by a court order. This agreement comes after the SEC filed a lawsuit on October 5, 2023, when Musk refused to appear for testimony in September as part of the regulator’s investigation into potential violations related to his stock purchases and statements made in connection with the Twitter acquisition in 2022.
The SEC claimed that Musk had raised no objections to the subpoena when it was initially served or in the following months. However, just two days before his scheduled testimony, Musk abruptly notified SEC staff that he would not appear. The SEC argued that additional testimony from Musk is necessary due to the “thousands of new documents” it received from various parties.
A magistrate judge ruled in favor of the SEC on February 10, ordering Musk to testify again. While Musk had argued that the SEC’s investigation was baseless and harassing and sought irrelevant information, the court ruled to enforce the SEC’s subpoena. The judge stated that the evidence is relevant and the testimony is not unduly burdensome for Musk.
Musk, who is also the CEO of SpaceX, offered to acquire Twitter for $44 billion in April 2022 and completed the acquisition in October 2022 after facing legal challenges. Following the takeover, Twitter was rebranded as X. The SEC authorized an investigation in April 2022 to determine whether any securities laws were violated in connection with Musk’s purchases of Twitter stock and related statements and SEC filings.
Overall, this development signifies Musk’s willingness to cooperate with the SEC’s investigation into the Twitter acquisition. By agreeing to testify, Musk is taking a step towards resolving the regulatory concerns surrounding the acquisition. It remains to be seen how this testimony will impact the ongoing investigation and any potential legal consequences for Musk and Tesla.
