Elon Musk SEC Lawsuit – Will X’s Owner Become The US Regulator’s New Victim?

A new Elon Musk SEC battle resurfaced after the former skipped a court-ruled testimony regarding the acquisition of the X social media platform.

The rising calls inside the US Securities and Exchange Commission started after the billionaire businessman failed to appear to testify for X purchase in a hearing session. The Elon Musk SEC blame game started earlier this month, with the agency considering enforcing disciplinary action against Elon Musk.

SEC vs Elon Musk: What Happened?

The investigation dates back to 2022, when Elon Musk purchased the ex-Twitter social media platform, claiming that the deal included a violation of securities laws as the new owner started buying X stocks.

The agency and Twitter shareholders allege that Elon Musk disclosed his X purchase too late, over ten days. A Federal court called for testimony to bring Musk to be questioned about the acquisition process.

However, Elon Musk did not appear at the agreed hearing session and communicated his intention only three hours before the scheduled time.

This incident enraged the SEC, who had already flown three attornies to Los Angeles, besides other agency members, to attend the session, which is not bound to rescheduling due to Musk’s absence.

In his defense, Elon Musk’s attorney said that a critical SpaceX launch was taking place on the same day of the testimony and that it was highly vital for Musk to attend the inception of the Polaris Dawn mission.

As a result, the SEC initiated a motion in a San Francisco Federal court to seek an order against Elon Musk, justifying his absence in a court-ordered testimony. The agency says that Musk is using “gamesmanship” to bend the regulator’s arm and must be held accountable for his behavior.

Elon Musk SEC Fines

In its motion, the SEC called to impose fines on X’s owner to deter any further possible absence from October’s session and to compensate for the attorney’s travel expenses.

On the other hand, Musk’s attorney stated that such sanctions are “drastic” because his client had to urgently travel to attend the launch on the East Coast on the morning of the testimony. The lawyer also mentioned that they asked the SEC to reschedule the hearing session to the following day.

Elon Musk SEC Lawsuit Timeline

This dispute would not be the first, as troubles started as soon as Elon Musk took over X. In April 2022, Musk was criticized for the late disclosure of the Twitter stock acquisition. One month later, Twitter shareholders accused the new owner of stock manipulation, which caused tremendous price volatility.

Other lawsuits include Dogecoin pump-and-dump allegations, Delaware’s Chancery Court to finalize Twitter’s $44 billion deal, and multiple testimony accusations citing Musk’s attempts to avoid a hearing session.

Conclusion

The US financial regulator returns with new prey for scrutiny. The SEC now targets Elon Musk, owner of multiple businesses, including X, Tesla, and SpaceX. The agency seeks to enforce legal action against Elon Musk, including sanctions for failing to appear on time.

At the same time, the other side pleads that a crucial SpaceX launch rendered Musk unable to attend the testimony as it was scheduled on the morning of the same day.