A federal judge has sided with the Securities and Exchange Commission, ordering billionaire Elon Musk to testify again in the agency’s investigation of his 2022 purchase of Twitter.
Musk has already testified twice in the matter but didn’t show up for a third session. He is resisting a subpoena, arguing the SEC’s requests were unreasonable and harrassing.
U.S. Magistrate Judge Laurel Beeler of the Northern District of California on Saturday said the SEC has the authority to issue a subpoena, that the “evidence is relevant and material to the SEC’s investigation, and the testimony is not unduly burdensome.”
A lawyer for Musk didn’t return a request for comment on Sunday.
Musk’s initial testimony was in July 2022, but the SEC has been pursuing additional testimony since it received “thousands of new documents” after those appearances. The SEC said it wants to ask him about the new information received after his earlier testimony.
The judge ordered both sides to confer within a week to decide on a date and location for the testimony. If they can’t agree, they can submit a joint letter brief with their respective positions, and the court will decide the dispute for them.
The SEC is investigating whether Musk committed civil fraud by not disclosing his plans for Twitter (now called X) when he bought its shares between January and April 2022, according to court filings.
When Musk first reported buying shares, he said he was a passive shareholder who wasn’t planning to take over or influence Twitter. But then he disclosed that the company had invited him to join its board, and he later offered to buy Twitter for $44 billion, which he did in October 2022.
Musk was scheduled to provide testimony for the SEC’s investigation on Sept. 15, but he didn’t show up. The SEC later offered to meet with him in October in Fort Worth, Texas, which is closer to Musk’s home in Austin. The agency’s efforts “were met with Musk’s blanket refusal to appear for testimony,” the SEC wrote.
Musk’s lawyers told the SEC he wouldn’t appear because the investigation was “frivolous,” and called the SEC’s multiple document requests and demand for further testimony “troubling government action.” The SEC asked Musk to reconsider his refusal to testify, but Musk didn’t respond, court documents said.
Write to Janet H. Cho at [email protected]
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