SEC Calls For Elon Musk Penalties If He Keeps Dodging Depositions Over Twitter Purchase

Elon Musk could face sanctions over his alleged "gamesmanship and delay tactics" in a federal probe of his $44 billion purchase of Twitter.

The Securities and Exchange Commission on Friday asked a federal judge to "consider meaningful conditional relief" after Musk failed to appear for a court-ordered deposition last week.

The Sept. 10 no-show by the world's richest man was his second since September 2023 and came the same day his SpaceX company launched a Falcon 9 rocket from Cape Canaveral, Florida, according to court papers posted online by CNBC.

SpaceX announced the planned liftoff of the Polaris Dawn mission two days earlier, meaning that Musk "surely was already aware by then" that it was scheduled for the same day as his deposition, SEC lawyer Robin Andrews argued.

"Despite this advance knowledge, Musk did not notify the SEC of his intent to attend the launch until three hours before his testimony was to begin, and after the SEC spent thousands of dollars to fly three attorneys to Los Angeles," Andrews wrote.

Musk's move violated a May 31 court order that required him to seek "written consent of the SEC or order of the Court" to reschedule the deposition, Andrews wrote.

"Musk has now failed to appear before the SEC twice: first in September 2023, in defiance of a lawful administrative subpoena, and last week, in defiance of a clear court order," Andrews added.

"The Court must make clear that Musk's gamesmanship and delay tactics must cease."

In response, Musk lawyer Alex Spiro said weather conditions delayed the launch and made it impossible for the billionaire to fly to California in time for the deposition.

Spiro also said there was no need for the "drastic action" of imposing sanctions because both sides had set a new date of Oct. 3 for Musk's deposition, and because his testimony "is not urgent, and the SEC has never argued such."

The SEC is investigating whether Musk violated securities laws when he began buying Twitter stock in early 2022 and allegedly waited at least 10 days too long to reveal he had already acquired 5% of Twitter, according to Reuters.

Musk has said that he misunderstood the SEC's disclosure requirements and that "all indications" showed his delay was a "mistake."

He closed on the leveraged buyout of Twitter in October 2022 and later renamed the social media company X.