A federal court in California is enforcing a subpoena for Elon Musk to testify before the US Securities and Exchange Commission regarding potential violations of federal securities laws in connection with his purchase of Twitter.
The court ruled the evidence gathered is relevant and material to the SEC’s investigation and the testimony required of Musk is not unduly burdensome, a court filing Saturday said. The two parties were ordered to meet within one week and decide on a date and location for the testimony.
Musk had testified before the SEC twice in half-day sessions on July of 2022. But the agency, having since received “thousands of new documents” from various parties, including some authored by Musk, wants to ask him about new information. Musk’s counsel agreed with the SEC to testify last September before requesting to postpone the meeting by one day and later refusing to appear, according to the filing dated Saturday.
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The SEC is seeking information about Musk’s purchases of Twitter stock ahead of the company’s acquisition and statements he made about his investments. The SEC sent Musk a letter in 2022 asking for information about the delayed disclosure of his Twitter stake, which he reported a week late.
The Tesla CEO and co-founder, whose purchase of Twitter, now known as X, concluded in October of 2022, refutes the grounds for the SEC’s investigation, calling it baseless and claiming it seeks irrelevant information, court filings say.
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Musk also contends the subpoena exceeds the SEC’s authority because it was issued by an SEC staffer appointed by the agency’s director of enforcement, not by an officer appointed by the president, a court or the head of a federal department. The court denied this on Saturday, saying the subpoena is authorized by the Exchange Act, which primarily regulates transactions of securities in the secondary market.