The U.S. Securities and Exchange Commission (SEC) has asked a federal judge to impose sanctions on Tesla Inc. (TSLA) and SpaceX CEO Elon Musk if he continues to avoid appearing for a deposition.
What happened: The SEC is investigating whether Elon Musk or his associates engaged in securities fraud in 2022, when he sold his Tesla shares and increased his stake in Twitter, now rebranded as X.
In May, Musk was court-ordered to give a deposition to financial regulators about his dealings with Twitter.
But the tech billionaire failed to appear before the SEC, first in September 2023 and again last week, contrary to an explicit court order, according to SEC attorney Robin Andrews, CNBC reported.
Judge Andrews asked the judge to consider sanctions if Musk continues to delay, and the SEC also plans to ask the court to hold Musk in “civil contempt” for canceling his September 10 testimony with just hours’ notice.
Related article: Analyst predicts that China is “unlikely to match NVIDIA in the near term” as U.S. sanctions prompt search for rival to Jensen Huang’s chip giant
Musk’s testimony has been rescheduled for early October at the SEC’s offices.
Musk’s lawyer, Alex Spiro, countered that “such extreme measures are inappropriate,” adding that Musk and his company are cooperating with several other SEC investigations.
X users shared the news that the SEC intends to seek sanctions against Musk, claiming that the tech billionaire was “busy that day overseeing the launch of SpaceX’s Polaris Dawn mission.”
In response, Musk seemed to agree, describing the mission as “the riskiest astronaut mission ever.”
He noted that strict weather constraints were only met on the night of the launch.
“The weather constraints for this mission were also very severe and it only cleared up that evening. I had to make the decision to continue or abort. Their lives came first.”
This is our most dangerous astronaut mission to date and I am responsible for their safety.
The weather constraints for this mission were also very severe, and it only cleared up that evening.
I had to make a go or no go decision. Their lives came first.
— Elon Musk (@elonmusk) September 21, 2024
Why it matters: In April of this year, the U.S. Supreme Court upheld a 2018 settlement with the SEC after Musk claimed he had “secured funding” to privatize Tesla, a claim the SEC found to be false.
Musk previously aired his frustrations with the SEC on Lex Friedman’s podcast, criticizing the agency for failing to protect retail investors from hedge funds. “The SEC never went after the hedge funds that were shorting Tesla and continuing to distort it. Not once,” he said at the time.
After the SEC sued Musk last year over his Twitter stock purchases, he countered that the agencies were badly needed to be overhauled.
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