A federal judge has dismissed the U.S. Securities and Exchange Commission’s (SEC) request to penalize Elon Musk for skipping a court-ordered deposition in its investigation into his $44 billion acquisition of Twitter, now known as X.
Background of the Case
On September 10, Musk was scheduled to attend a deposition as ordered by the court, but he failed to show up, citing his presence in Cape Canaveral, Florida, where he was overseeing SpaceX’s Polaris Dawn mission. Musk later testified on October 3 and agreed to reimburse the SEC’s travel costs of $2,923.
Judge’s Decision
Judge Jacqueline Scott Corley of the U.S. District Court in San Francisco determined that sanctions were unwarranted, as Musk complied by testifying in October and covering the SEC’s travel costs. In her verdict, Corley wrote, “Because the present circumstances forestall any occasion for meaningful relief that the court could grant, the SEC’s request is moot.”
SEC’s Investigation
The SEC is probing whether Musk violated securities regulations by delaying disclosure of his Twitter stock purchases in early 2022. The regulator claims Musk waited at least 10 days longer than required, allowing him to acquire shares at lower prices before revealing his 9.2% stake and later announcing plans to buy the platform outright.
Elon Musk’s Response
After the decision, Musk expressed his triumph on X, responding to a post from a user who applauded his success against the SEC. Musk wrote, “SEC. The middle word is definitely ‘Elon’s,’ but I can never remember what the other two words stand for.”
History of SEC Clashes
This is not Musk’s first legal clash with the SEC. In 2018, the agency sued him over Twitter posts about taking Tesla Inc. private. Musk settled by paying a $20 million fine, stepping down as Tesla’s chairman, and agreeing to have company lawyers vet certain tweets in advance.
The Ongoing Case
The case, SEC v. Musk, is being heard in the U.S. District Court for the Northern District of California.