Elon Musk faces SEC sanctions for failing to appear in court

Elon Musk, the CEO of X and several other companies with the letter “X” in their names, has been under fire from regulators for failing to testify this month in an investigation into Musk’s acquisition of Twitter.

In a document filed today, the US Securities and Exchange Commission (SEC) said it will seek sanctions against Musk because he did not appear in San Francisco federal court on September 10 as ordered by the court. According to the filing, Musk did not inform the SEC that he would not appear until just three hours before his testimony was scheduled to begin.

“The Court must make it clear that Musk’s manipulation and delay tactics must stop,” the filing reads.

According to the filing, Musk spent September 10 overseeing the launch of Polaris Dawn, a spacecraft built by his space exploration company SpaceX.

The SEC’s legal counsel offered to reschedule Musk’s hearing for the next day, September 11. But Musk’s lawyer refused, and only agreed to court dates in October.

The SEC is seeking “meaningful conditional relief” if Musk fails to appear in court in October. The agency also indicated it plans to file a sanctions motion against Musk to recoup his travel costs for the canceled testimony and other relief. (In the filing, the SEC said it spent “thousands of dollars” to fly three attorneys to Los Angeles for the Sept. 10 testimony.)

Musk’s court-mandated appearance stems from an investigation by the SEC, which is looking into whether the billionaire followed the law when disclosing his purchase of Twitter stock before buying the company for $44 billion in 2022. The investigation is also trying to figure out whether Musk’s statements about the deal were misleading; the SEC alleges that Musk took at least 10 days to disclose his purchase of Twitter shares.

This is the second time in recent years that Musk has been under SEC scrutiny. In 2018, the agency ordered Musk to step down as Tesla chairman and pay a $40 million fine for tweets related to Tesla shares that the SEC found to be market manipulation. At the time, Musk called the fraud allegations “unreasonable actions.”

The SEC has also investigated Musk and Tesla’s claims regarding the “fully autonomous” capabilities of Tesla vehicles, as well as Tesla’s use of company funds to build a “glass house” for Musk.

You can read the full filing below.

Joint Statement Regarding R… by SP-TechCrunch