The U.S. Securities and Exchange Commission (SEC) announced on Friday that it plans to seek sanctions against Elon Musk after he failed to appear for court-ordered testimony in the agency’s investigation of his $44 billion acquisition of Twitter. In a filing in San Francisco federal court, the SEC stated it would request an order compelling Musk to explain why he should not be held in civil contempt for notifying the agency just three hours before his scheduled Sept. 10 testimony that he would not attend.
Musk, the CEO of Tesla and SpaceX, went to Cape Canaveral, Florida, on the day in question to oversee the launch of SpaceX’s Polaris Dawn mission. However, the SEC argued that Musk, as SpaceX’s chief technical officer, “surely was already aware” of the launch plans, since SpaceX had discussed them two days earlier. The SEC accused Musk of violating a May 31 court order that mandated his testimony, calling his excuse “gamesmanship.”
“Musk’s delay tactics must cease,” SEC lawyer Robin Andrews wrote, urging the court to take action. In response, Musk’s attorney, Alex Spiro, described the proposed sanctions as “drastic” and unnecessary. He argued that Musk’s absence from the launch could have endangered the astronauts’ safety and noted that the testimony had been rescheduled for Oct. 3. Spiro further claimed that Musk missed the original testimony due to an emergency beyond his control and that such an event is unlikely to occur again.
While an SEC spokesperson declined to comment, the agency expressed concerns in its court filing that Musk could still fail to appear on Oct. 3. The SEC is investigating whether Musk violated securities laws in early 2022 when he began accumulating Twitter stock. The regulator has criticized Musk for delaying disclosure of his Twitter stock purchases by at least 10 days, despite being required to disclose ownership stakes of 5% or more in public companies. Musk eventually revealed a 9.2% stake in Twitter and subsequently offered to buy the company.
In July, Musk admitted he misunderstood SEC disclosure requirements, calling the delay a “mistake.” The SEC filed a lawsuit last October after Musk missed a scheduled interview at its San Francisco office. Musk has long clashed with the SEC, accusing the agency of harassment through repeated subpoenas. His disputes with the SEC date back to 2018 when the agency sued him over tweets about taking Tesla private. Musk settled that case by paying a $20 million fine, agreeing to have Tesla lawyers review some of his social media posts, and stepping down as Tesla’s chairman.
