Elon Musk Faces SEC Subpoena for Testimony on X Acquisition
Elon Musk is once again in a clash with the US Securities and Exchange Commission (SEC), but this time he’s trying to avoid a subpoena. The SEC took legal action on October 5, seeking to force Musk to comply with a subpoena regarding the acquisition of X (formerly Twitter). However, Musk has been trying to avoid the order since receiving the subpoena in May.
SEC Warns of Consequences if Musk Fails to Comply
The SEC has announced that if a person or entity refuses to comply with a subpoena issued by its enforcement staff, they may file a subpoena enforcement action in federal court. This means that Musk could face real consequences if he fails to comply with the previous order.
SEC Investigation into Twitter Acquisition
The SEC’s investigation into the acquisition of Twitter is related to potential violations of federal securities laws. It specifically focuses on Musk’s purchases of Twitter stock in 2022 and his statements and SEC filings relating to Twitter during that time.
Experts Believe Musk Must Comply
Musk attempted to object to the subpoena before a September hearing date but did not attend the hearing. It remains unclear whether he intends to resist the SEC. However, experts believe that his chances of successfully avoiding compliance are slim and that he will likely have to comply soon.
Legal Experts Weigh In on the Case
Stephen Crimmins, partner at Davis Wright Tremaine, spoke about the case with Reuters. He highlighted that this case differs from Musk’s past clashes with the SEC because the law grants the regulator subpoena power for investigative testimony and document gathering. As a result, the SEC has taken an earnest approach, leaving Musk with limited options.
Hot Take: Musk’s Options are Limited and Non-compliance Could Lead to Serious Consequences
Musk’s attempt to avoid the SEC subpoena regarding the X acquisition is unlikely to succeed. Legal experts suggest that he will eventually have to comply with the order. Failure to do so could result in hefty fines or even a jail sentence, although extreme circumstances would likely be required for such severe consequences to be imposed.
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