The U.S. SEC to Force Elon Musk to Testify over Twitter Stock Purchases

The U.S. Securities and Exchange Commission will try to force Elon Musk to testify over his Twitter stock purchases.

Investigation into Alleged Securities Law Violation

The federal agency charged with regulating securities markets is currently investigating Musk for allegedly violating securities laws when he bought Twitter shares before acquiring the social media platform, now known as X.

Buying Twitter stock before acquiring the company could mean Musk was guilty of insider trading, market manipulation, or even violation of fair market disclosure.

SEC’s Frustration with Musk’s Lack of Cooperation

The SEC said on Thursday that Musk failed to appear to testify last month, as requested. The agency has filed a document in federal court in San Francisco, stating that it is looking into Musk’s statements and disclosures about the stock transactions.

Since the SEC began its probe in April 2022, Musk has sent hundreds of documents and testified twice in July 2022, according to the filing. The investigation is ongoing and nonpublic.

Musk’s Objections to the Interview

The agency claimed that Musk agreed to an interview with the SEC in San Francisco last month. However, two days before the scheduled meeting on September 15, Musk raised objections, stating that San Francisco was not a suitable location. He argued that San Francisco jurors had expressed negative opinions of him in a questionnaire.

The SEC suggested relocating the interview to Fort Worth, Texas, where Musk resides, but the agency says he refused to meet at all.

Past Run-ins with the SEC

This is not the first time Musk has clashed with the SEC. Previously, the Tesla CEO was ordered to have a lawyer review his Tesla-related tweets after he tweeted in 2018 about having “funding secured” to take Tesla private for $420 per share. Following the tweet, Tesla’s share price fluctuated, triggering an SEC investigation into possible securities fraud.

Other Ongoing Investigations

The SEC is also investigating Musk and Tesla regarding their claims about Tesla vehicles’ “full self-driving” capabilities. Additionally, Tesla’s use of company funds to build Musk a “glass house” is under scrutiny.