Elon Musk, the chief executive of X and several other companies with the letter “X” in their names, is in the crosshairs of regulators after failing to testify this month in an investigation related to Musk’s acquisition of Twitter.
In a filing today, the U.S. Securities and Exchange Commission (SEC) said it intended to seek sanctions against Musk after Musk skipped an appearance ordered by the federal court in San Francisco on Sept. 10. According to the filing, Musk did not notify the SEC that he would not appear until just three hours before his testimony was set to begin.
“The Court should make clear that Musk’s delaying tactics and sleight of hand must cease,” the filing reads.
Instead, Musk spent Sept. 10 overseeing the launch of Polaris Dawn, a spacecraft made by his space exploration company, SpaceX, according to the filing.
The SEC’s legal counsel offered to reschedule Musk’s hearing for the following day, September 11, but Musk’s lawyer declined and only agreed to hearing dates in October.
The SEC is seeking “significant conditional relief” if Musk fails to appear in court in October. The agency also noted that it plans to file a sanctions motion against Musk to recover his travel costs for the canceled testimony and other compensation. (In the filing, the SEC said it spent “thousands of dollars” to fly three lawyers to Los Angeles for the Sept. 10 testimony.)
Musk’s court-ordered appearance stems from the SEC’s investigation into whether the billionaire followed the law by disclosing his purchases of Twitter stock before acquiring the company for $44 billion in 2022. The probe is also seeking to uncover whether Musk’s statements about the deal were misleading; the SEC alleges Musk waited at least 10 days too long to disclose that he was buying Twitter stock.
This is the second time Musk has come under scrutiny from the SEC in recent years. In 2018, the agency ordered Musk to step down as Tesla chairman and pay $40 million in fines for tweets related to Tesla stock that the SEC deemed market manipulation. At the time, Musk called the fraud charges an “unwarranted action.”
The SEC has also investigated Musk and Tesla over claims about Tesla vehicles’ “full self-driving” capabilities, as well as Tesla’s use of company funds to build Musk a “glass house.”
You can read the full document below.