SEC Seeks Sanctions Against Elon Musk

By Jonathan Stempel and Chris Prentice

Reuters – The U.S. Securities and Exchange Commission (SEC) announced its intention to seek sanctions against Elon Musk after he failed to attend court-ordered testimony regarding his $44 billion Twitter takeover.

In a San Francisco federal court filing, the SEC requested a motion to hold Musk in civil contempt for notifying them three hours before the September 10 testimony that he would not be present.

Musk, whose ventures include electric car company Tesla and rocket firm SpaceX, was in Florida overseeing SpaceX’s Polaris Dawn mission that day. However, the SEC asserted that Musk, as SpaceX’s chief technical officer, likely knew of the scheduled launch two days before.

SEC lawyer Robin Andrews criticized Musk’s reasoning as a tactic to delay proceedings, stating, “Musk’s gamesmanship and delay tactics must cease.”

Musk’s attorney, Alex Spiro, replied that sanctions were excessive and unwarranted, arguing that Musk’s absence could have jeopardized astronauts’ safety and noting that his testimony has been rescheduled for October 3.

Spiro explained that Musk’s absence stemmed from an unavoidable emergency and emphasized that there was no indication of a repeat of this issue.

An SEC spokesperson did not comment, but stated that the regulator is concerned Musk may again fail to appear on October 3.

The SEC’s investigation pertains to whether Musk violated securities laws by delaying the disclosure of his Twitter stock acquisitions in early 2022. Musk faced backlash for taking over ten days to announce his 9.2% stake in Twitter before proposing a full buyout.

In July, Musk claimed he misunderstood SEC disclosure rules and suggested his delay was a simple “mistake.” The SEC previously sued Musk after he skipped a scheduled interview last October.

Musk has often clashed with the SEC, especially after a 2018 lawsuit involving misleading tweets about taking Tesla private, for which he settled by paying a $20 million fine and agreeing to certain oversight conditions regarding his social media posts.