The Securities and Exchange Commission (SEC) is escalating its legal pressure on Elon Musk, urging a federal judge to impose sanctions if the Tesla and SpaceX CEO continues to dodge a deposition. The SEC is investigating whether Musk or his associates engaged in securities fraud in 2022 when Musk sold Tesla shares and increased his stake in Twitter, now rebranded as X.
In May, the court ordered Musk to appear for a deposition with the SEC regarding the Twitter deal. However, the tech billionaire twice failed to show up, first in September 2023 and again last week, directly defying a court order. SEC attorney Robin Andrews, as reported by CNBC, has requested the judge to consider sanctions, including holding Musk in “civil contempt” for canceling a previous deposition with only a few hours’ notice.
Musk’s deposition has been rescheduled for early October at an SEC office. His lawyer, Alex Spiro, argues that “such drastic action would be inappropriate,” claiming that Musk and his companies have been cooperating with the SEC in other ongoing investigations.
The SEC’s move comes after a user on X, the social media platform formerly known as Twitter, shared the news about the SEC’s intent to seek sanctions against Musk, suggesting that the tech billionaire “was busy overseeing the launch of SpaceX’s Polaris Dawn mission that day.” Musk seemingly agreed, describing the mission as “our highest-risk astronaut mission ever” and highlighting the stringent weather constraints that only cleared on the night of the launch. He stated, “Their lives came first.”
This recent development adds another layer to the ongoing legal battle between Musk and the SEC. Earlier this year, the U.S. Supreme Court upheld a 2018 SEC settlement stemming from Musk’s claim of having “funding secured” to privatize Tesla, which the SEC deemed false. Musk has also expressed dissatisfaction with the SEC in the past, criticizing the agency’s failure to protect retail investors from hedge funds. He has called for a comprehensive overhaul of the SEC, arguing that it needs to be more effective in holding Wall Street accountable.
The SEC’s pursuit of sanctions against Musk is likely to intensify scrutiny of his business practices and further fuel discussions about the role of regulatory bodies in overseeing high-profile companies and individuals in the technology sector.
