Is Elon Musk’s Twitter acquisition legitimate? California court seeks answers on SEC investigation
A California federal court ruled in favour of the SEC, requiring Elon Musk to answer further questions regarding his acquisition of Twitter (now X) on February 12. The judge deemed the SEC’s investigation legitimate and the requested testimony relevant, rejecting Musk’s claims of harassment and irrelevant inquiries, according to a report by Bloomberg.
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The order from US Magistrate Judge Laurel Beeler, issued over the weekend, formalizes a previous tentative ruling made in December that favoured the SEC’s position.
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Musk had testified before the SEC twice in half-day sessions in 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.
His 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 February 10, the report added.
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While Musk testified twice in 2022, the SEC received new documents and sought clarification on his actions and statements relating to his Twitter stock purchases. Musk initially agreed to an additional interview but later backed out.
The SEC is examining whether Musk followed disclosure rules and made accurate public statements about his Twitter stock purchases and intentions.
Musk maintained that the investigation was baseless and sought irrelevant information. He also challenged the subpoena’s validity, arguing it was issued by an unauthorized official.
Friction between Musk and the SEC began when the regulator sued him after he tweeted “funding secured” in 2018 about a possible plan to take Tesla private. To settle that case, Musk agreed that a Tesla lawyer would vet his tweets about the electric vehicle maker. The SEC sued him again in 2019 for allegedly breaching that provision.
Musk has asked the U.S. Supreme Court to review the agreement, saying it violates his constitutional right to free speech.
(With inputs from agencies)
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Published: 12 Feb 2024, 07:51 AM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.