Elon Musk failed to attend the hearing pertaining to the investigation concerning his proposed $44 billion acquisition of Twitter. The Securities and Exchange Commission has now proposed penalties.
Earlier this year, a federal judge mandated Elon Musk to appear in court as part of the SEC's investigation concerning his $44 billion purchase of Twitter. The SEC is looking into whether Musk abided by the law when disclosing his Twitter stock purchases and whether his comments regarding the deal were misleading.
Initially, Musk and the SEC agreed on a September 10 testifying date, but just three hours before the hearing, Musk's attorney informed the SEC that Musk, also the CEO of SpaceX, had an urgent business trip to the East Coast for the launch of the Polaris Dawn mission, preventing him from attending the hearing or rescheduling for the following day.
Both parties then had difficulty finding a suitable rescheduling date, eventually settling on an early October one, according to court documents.
The SEC asserts that Musk breached a court order requiring him to seek the SEC's consent or court approval to modify the testifying date, which he allegedly did not do before absenting himself on September 10.
"Musk's excuse reeks of manipulation," the SEC stated in the filing. "SpaceX had already announced the launch two days earlier... As SpaceX's Chief Technical Officer, Musk must have known by then that the company was targeting the morning of his SEC testimony for the launch."
They further added, "Despite this prior knowledge, Musk did not notify the SEC of his intention to attend the launch until three hours before his hearing was set to begin, after the SEC had spent substantial funds to fly three attorneys to Los Angeles."
Musk has tried to opposing subsequent calls to testify, maintaining he has already done so twice.
The SEC has asked the court to implement "worthy sanctions" if Musk fails to appear during the new October hearing date. The SEC also plans to file a motion for sanctions against Musk to recoup its costs for the cancelled hearing and other related expenses.
In their reply to the court, Musk's attorneys argued, "The court's intervention is unnecessary, as the parties have already agreed on a new testifying date... Musk is already under an order from this court to appear 'unless an emergency arises that Musk did not create and could not have avoided.'"
This latest confrontation is simply the most recent escalation of tension between Musk and the SEC, which dates back to 2018 when the agency suited him for lying about having "secure funding" to privatize Tesla.
The tech CEO, Elon Musk, is the Chief Technical Officer of SpaceX, often dealing with important tech-related business matters such as the Polaris Dawn mission. Despite knowing about the scheduled launch that clashed with his SEC hearing, Musk did not inform the SEC in a timely manner.
