Elon Musk Faces Possible Sanctions as SEC Probes Twitter Acquisition
Elon Musk, the well-known entrepreneur, is currently under investigation by the U.S. Securities and Exchange Commission (SEC) for his recent purchase of Twitter for $44 billion. As a result of Musk’s failure to attend a court-ordered deposition related to the acquisition, the SEC is considering imposing sanctions against him.
According to Reuters, the regulatory body announced its intention to seek sanctions after Musk canceled his scheduled testimony just three hours before it was supposed to take place on September 10. In response, the SEC filed a motion in a San Francisco federal court, stating that it would request an order requiring Musk to explain why he should not be held in civil contempt for failing to appear.
The SEC argues that Musk’s decision to skip the deposition at the last minute violated a court order from May 31 that compelled his testimony. Despite Musk’s role as the chief technical officer of SpaceX, the SEC believes that he was aware of the planned launch of SpaceX’s Polaris Dawn mission well in advance, as there were internal discussions about it two days prior to the missed testimony.
The SEC’s lawyer, Robin Andrews, accused Musk of engaging in “gamesmanship” and urged the court to put an end to such tactics. Musk’s attorney, Alex Spiro, called the SEC’s move “drastic” and unnecessary, arguing that Musk’s presence was crucial for the safety of the astronauts involved in the mission. Spiro also stated that the testimony has already been rescheduled for October 3 and that the failure to testify was due to an “emergency” that is unlikely to occur again.
The SEC’s investigation focuses on whether Musk violated securities laws by not disclosing his initial accumulation of Twitter stock in a timely manner. Securities regulations require investors to disclose once they own 5% of a public company. Musk delayed revealing his 9.2% stake in Twitter, leading to accusations of misleading shareholders. Musk has since claimed that the delay was a misunderstanding of the disclosure requirements and referred to it as a “mistake.”
This is not the first time Musk has had a run-in with the SEC. In 2018, he settled a lawsuit over tweets about taking Tesla private, agreeing to pay a $20 million fine and stepping down as Tesla’s chairman.
Meanwhile, the SEC has been facing criticism for its approach to regulating the crypto industry. Critics argue that the SEC has failed to establish a clear regulatory framework for cryptocurrencies and instead relies on enforcement actions against key industry players. As we reported earlier, a coalition of seven U.S. states has joined forces to challenge the SEC’s regulation of cryptocurrency.
Stay updated with the latest crypto news by following us on Google News.
