The U.S. Securities and Exchange Commission (SEC) on September 20 announced plans to sanction Elon Musk for failing to appear for court-ordered testimony in connection with the SEC’s investigation into the company’s $44 billion acquisition of Twitter.
The SEC said in a filing in the U.S. District Court for the Northern District of California that it plans to file a motion asking Musk to explain why he should not be held in civil contempt for failing to comply with a May 31, 2024 court order directing him to testify on Sept. 10 at the SEC’s Los Angeles office.
The parties had originally agreed that Musk would appear to testify on September 19, but in July, Musk’s lawyers requested a change of date due to scheduling conflicts. The SEC acceded to the request and rescheduled the testimony for September 10. However, on the morning of September 10, Musk’s lawyers wrote to the SEC informing them that his duties as SpaceX’s chief technology officer required him to make an emergency trip to the East Coast for a “high-risk” Polaris Dawn launch.
Musk’s lawyer, Alex Spiro, argued in the lawsuit that his client was absent on September 10 because of an unavoidable emergency related to the launch of Polaris Dawn that required him to be at Cape Canaveral.
Musk, SpaceX’s chief technology officer, “was required to be present at the Cape Canaveral launch site for the Polaris Dawn launch, and the timing of the launch was unpredictable due to weather,” Spiro wrote, adding that it was impossible to predict when the launch would occur more than a few hours in advance.
Spiro argued that no sanctions were necessary because the delay was due to an emergency and Musk had already agreed to a new testimony date in October, adding that Musk has cooperated fully with the SEC on multiple investigations.
But SEC lawyers said in the filing that Musk’s role at SpaceX meant he certainly should have known about the planned launch, and that the emergency excuse was hollow.
“Mr. Musk’s excuses themselves reek of maneuvering,” SEC lawyer Robin Andrews said in the filing. “The Court must make it clear that Mr. Musk’s maneuvering and delaying tactics must end.”
Andrews argued that Musk’s last-minute cancellation created unnecessary expenses because SEC lawyers from San Francisco and Washington had already traveled to Los Angeles to testify.
The SEC plans to file a motion seeking an order requiring Musk to explain why he should not be held in civil contempt for failing to appear at his scheduled testimony, and is also seeking recovery of travel expenses related to the canceled testimony.
The SEC’s investigation is part of an ongoing probe into whether Musk violated securities laws in connection with his 2022 acquisition of Twitter Inc. and subsequent renaming of Twitter Inc. to X.
Specifically, regulators are looking into whether Musk timely filed required paperwork when he initially purchased shares in the social media company.
A court hearing on the matter is scheduled for later this month.
From The Epoch Times