Elon Musk, the CEO of X and various other companies that include the letter “X” in their names is facing scrutiny from regulators after failing to appear for a court-ordered testimony related to his acquisition of Twitter.
According to a filing submitted yesterday, the U.S. Securities and Exchange Commission (SEC) intends to seek sanctions against Musk following his absence from a scheduled appearance at a Los Angeles courthouse on September 10.
The SEC’s filing highlighted that Musk notified them of his decision to skip the testimony just three hours before it was set to commence. The agency criticized this move as an example of “gamesmanship and delay tactics,” emphasizing the need for such behavior to end. Instead of attending court, Musk was reportedly overseeing the launch of Polaris Dawn, a spacecraft developed by his space exploration company, SpaceX.
To resolve the situation, SEC legal counsel proposed rescheduling Musk’s hearing for September 11; however, his attorney declined this offer and only agreed to potential court dates in October. As part of its filing, the SEC indicated it would seek “meaningful conditional relief” if Musk did not appear in court next month.
Furthermore, they mentioned plans to file a motion for sanctions aimed at recovering travel costs incurred due to his absence—costs amounting to “thousands of dollars” spent on flying three attorneys out for the hearing.
This legal proceeding stems from an investigation into whether Musk adhered to regulations when disclosing his acquisition of Twitter stock purchases before acquiring the platform for $44 billion in 2022. The SEC is particularly focused on claims that he delayed informing investors about these transactions by at least ten days, a period during which significant market activity occurred.
Musk’s current predicament with the SEC marks yet another chapter in his contentious history with regulatory bodies; previously in 2018, he faced fines and was mandated by the agency to step down as Tesla’s chairman due largely in part to tweets deemed as manipulating market conditions regarding Tesla shares.
The ongoing scrutiny also includes investigations into Tesla’s self-driving capabilities and allegations concerning inappropriate use of company funds for personal projects such as building a lavish “glass house.”
