US SEC Seeks Sanctions Against Elon Musk

The US Securities and Exchange Commission (SEC) has advised that it will seek sanctions against Elon Musk, who didn’t show up to give testimony and only advised of his inability to attend three hours before the scheduled interview time.

In May, the SEC sought a court order compelling Elon Musk to testify in the regulators’ probe into whether Musk violated security laws when he started purchasing Twitter shares in 2022.

In theory, Musk should have disclosed his purchase of shares when he had accumulated a 5% stake in the company. However, he only advised that he was gathering Twitter shares once he had amassed a 9.2% share in the company, 10 days later than the regulations required. Musk claims he misunderstood filing requirements and that the delay was only a mistake.

SEC lawyers flew to Los Angeles for Musk’s testimony. Three hours before the appointment, his lawyer informed them that Musk would not attend due to an urgent trip to Cape Canaveral, Florida, to oversee the launch of SpaceX’s Polaris Dawn mission.

The court order issued in May required Musk to seek “written consent of the SEC or order of the Court” to modify any scheduling related to the testimony.

Beyond the requirement for written consent, the SEC said in its filing, “SpaceX had already announced that it was targeting a Tuesday morning launch two days earlier… As the company’s Chief Technical Officer, Musk surely was already aware by then that SpaceX was targeting the morning of his SEC testimony for the launch.”

Robin Andrews, a lawyer for the SEC, wrote, “Musk’s excuse itself smacks of gamesmanship” and that “the court must make clear that Musk’s gamesmanship and delay tactics must cease.”

Musk’s lawyer, Alex Spiro, described the sanctions as drastic and unnecessary. He explained that an emergency beyond Musk’s control caused his absence and that they had rescheduled the interview.