Elon Musk, the CEO of several companies with “X” in their names, became a target of regulators this month after he declined to testify in an investigation into his Twitter acquisition.
In a filing today, the U.S. Securities and Exchange Commission (SEC) said it plans to seek sanctions against Musk after he failed to appear in court as ordered in a Los Angeles court on September 10. According to the filing, Musk did not notify the SEC that he would not appear until just three hours before the deposition was scheduled to begin.
“The court must make clear that Musk’s ploys and delaying tactics must stop,” the filing reads.
According to the documents, Musk instead spent September 10 overseeing the launch of Polaris Dawn, a spacecraft built by his space exploration company SpaceX.
The SEC’s legal counsel proposed to postpone Musk’s hearing until the following day, September 11. But Musk’s lawyers refused, agreeing to set a court date only for October.
The SEC is seeking “meaningful conditional relief” if Musk fails to appear in court in October. The agency also said it plans to file a motion to sanction Musk to recover travel expenses for the canceled deposition and other relief. (The SEC said in its filing that it spent “thousands of dollars” to bring three lawyers to Los Angeles for the Sept. 10 hearing.)
Musk’s court appearance stems from an SEC investigation into whether the billionaire complied with the law when he disclosed his purchase of Twitter stock before buying the company for $44 billion in 2022. The probe also seeks to determine whether Musk’s statements about the trades were misleading. The SEC claims Musk waited too long—at least 10 days—to disclose his purchase of Twitter stock.
The investigation marks the second time Musk has come under fire from the SEC in recent years. In 2018, the agency ordered Musk to step down as Tesla chairman and pay a $40 million fine for tweets about Tesla stock that the SEC deemed market manipulation. At the time, Musk called the fraud allegations “unjustified.”
The SEC also investigated Musk and Tesla over claims that Tesla vehicles had a “full self-driving” feature and that Tesla used company funds to build Musk a “glass house.”
You can read the full story below.
Update 9/20 5:48 PM PST: Originally we We wrote that Musk did not appear in court in San Francisco. The court was actually in Los Angeles. We have corrected this and regret the mistake.
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