Elon Musk asks court to reject SEC request to compel him to testify in Twitter investigation

NEW YORK, Nov 2 (Reuters) – Elon Musk asked a federal judge on Thursday not to force him to testify in the US Securities and Exchange Commission’s investigation into his $44 billion acquisition of social networking site Twitter.

Musk filed the objections in federal court in San Francisco, where the SEC filed a lawsuit against him on October 5 to compel him to testify in the investigation, which it launched in April 2022. The SEC’s subpoena exceeds the agency’s investigative authority, and is burdensome. Extremely striving to get “irrelevant”. Evidence,” Musk’s lawyers said in the lawsuit.

The SEC said it was investigating Musk’s purchases of Twitter stock in 2022 and his statements and SEC filings related to Twitter — which Musk later renamed to X — and that Musk declined to attend an interview in September regarding the investigation.

Alex Spiro, Musk’s lawyer, called the investigation “misleading.”

On Thursday, Spiro and Musk’s other lawyers said in the lawsuit: “The SEC’s prosecution of Mr. Musk has crossed the line into harassment.”

The SEC did not immediately respond to requests for comment. The agency said earlier that it was within its authority to request additional testimony from Musk, and that it had received new documents in the investigation since his last interview.

On April 4, 2022, Musk revealed that he had acquired a 9.2% stake in Twitter. It was 11 days after the SEC’s deadline for such disclosures. Musk initially said he intended to be a passive stakeholder, meaning he did not plan to acquire the company.

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Later that month, he announced plans to buy Twitter for $44 billion. He then tried to exit the deal, claiming that Twitter had not disclosed the full extent of bot activity on its platform.

After filing a lawsuit to complete the deal, Musk completed his acquisition of Twitter in late October 2022.

Musk submitted documents to the SEC related to the investigation and provided testimony in July of last year via video conference, the SEC said in a court filing. But SEC lawyers said they had more questions for Musk after seeing the documents.

The SEC issued 32 subpoenas in the investigation, and obtained testimony from Musk and three other individuals at least seven times, Spiro said in a second filing. He said Musk alone received five subpoenas to produce documents and three more to testify.

The SEC spent 18 months “committing its vast resources to investigating Mr. Musk for an untimely filing,” court documents said. “This is just the latest chapter in the agency’s more than five-year-long saga of harassment against Mr. Musk and related entities.”

The legal battle is the latest escalation in the tense relationship between the US market regulator and Musk, the world’s richest person.

The Securities and Exchange Commission sued Musk in 2018 over his social media posts, saying he obtained “secured financing” to take electric car maker Tesla Inc (TSLA.O) private. Musk settled, but the regulator sued him again in 2019, claiming he violated the terms of the agreement.

Meanwhile, Musk accused the agency of conducting “endless” investigations into him and Tesla.

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He said he would ask the US Supreme Court to review the legality of his settlement with the Securities and Exchange Commission, which would require him to examine some of his social media posts with Tesla’s lawyers.

(Reporting by Judy Godoy and Chris Prentice in New York; Reporting by Mohammed for the Arabic Bulletin) Additional reporting by Dan Whitcomb; Edited by Chizuo Nomiyama and Christian Schmollinger

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Chris Prentice reports on financial crimes, with a focus on securities enforcement issues. She previously covered commodity markets and trade policy. She has received awards for her work from the Society for the Advancement of Business Editorial Writing and the New York Women Journalists’ Club.

Judy Godoy reports on banking and securities law. Contact her at [email protected]

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