In a legal filing released in the Northern District of California on Thursday, attorneys representing the SEC alleged that Musk failed to appear for a testimony scheduled for September 15, as required by a subpoena served to the Tesla CEO in May 2023.
Broadly, the SEC's investigation is related to whether any individual engaged in securities fraud when purchasing Twitter shares last year, while Musk was acquiring stock in the company. Musk completed his purchase of Twitter, now known as X, in October in a deal valued at approximately $44 billion.
The SEC attorneys stated, "Musk’s ongoing refusal to comply with the SEC’s administrative subpoena is hindering and delaying the SEC staff’s investigation to determine whether violations of the federal securities laws have occurred. Accordingly, the SEC now asks the Court to compel Musk to appear for investigative testimony."
The SEC mentioned that it had made efforts to arrange a suitable time and place for a meeting with Musk, even offering to meet him at the SEC's office in Fort Worth, Texas, which is the closest to Musk's current residence in the Austin area. Several dates were proposed for meetings in October and November of this year.
"These good faith efforts were met with Musk’s blanket refusal to appear for testimony," the lawsuit states.
Elon Musk's attorney, Alex Spiro, responded, stating, "The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation—enough is enough."
SEC lawyers argued that Musk declined to comply with the subpoena, citing "several spurious objections, including an objection to San Francisco as an appropriate testimony location," even though Musk had previously not raised any objections to that location.
Furthermore, SEC lawyers claim that Musk believed the commission was using the subpoena to "harass" him, which he used as justification for his non-compliance. Musk also allegedly cited the recent publication of his biography by journalist Walter Isaacson as another reason for not testifying, suggesting that the book might contain "new information potentially relevant to this matter."
The SEC responded by stating, "The publication of Musk’s biography is not a legitimate basis for Musk to avoid compliance with a lawfully issued investigative subpoena. In any event, Musk’s initial refusal to comply with the subpoena has now presented his counsel with plenty of time to review the biography for any relevant information, and so this objection is now moot in addition to being legally insufficient from inception."
The SEC clarified in a statement that its "staff is continuing its fact-finding investigation and, to date, has not concluded that any individual or entity has violated the federal securities laws."
A hearing regarding the lawsuit is scheduled for November 9, as indicated in the legal filing.
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