Elon Musk is facing significant challenges regarding his missed deposition related to his 2022 acquisition of Twitter, now known as X. The U.S. Securities and Exchange Commission (SEC) has rejected Musk’s proposal to pay $2,923 for the missed meeting and is pursuing sanctions against him.
The SEC is investigating potential securities fraud involving Musk and his associates in 2022, particularly around Musk’s sale of Tesla shares and his increased investment in Twitter. After missing depositions, Musk suggested he would cover the travel expenses of three SEC lawyers who traveled to Los Angeles for the meeting. However, the SEC countered that merely requiring Musk to pay these costs wouldn’t be a sufficient deterrent to prevent others from disregarding court orders.
The agency insists that stronger sanctions are necessary, given Musk’s considerable financial resources. This underscores the seriousness of his missed deposition in September. Initially reluctant to participate in a third round of questioning, Musk ultimately agreed to meet with SEC attorneys and provided testimony on October 3.
Musk’s attorney, Alex Spiro, expressed doubt about the court’s capacity to consider sanctions, noting that Musk has already complied with the SEC’s requests. Nevertheless, the SEC appears dissatisfied and is pursuing more severe measures.
This situation adds complexity to Musk’s ongoing legal troubles related to Twitter. Earlier this year, the U.S. Supreme Court upheld a 2018 SEC settlement connected to Musk’s misleading statement about having “funding secured” to privatize Tesla. In May, Musk was ordered to appear for a deposition regarding the Twitter deal but missed two scheduled appearances. His lawyer informed the SEC that Musk had to urgently attend the launch of SpaceX’s Polaris Dawn in Cape Canaveral, Florida, which caused his absence.
This development highlights the SEC’s commitment to holding Musk accountable and ensuring compliance with regulatory standards. The outcome of the potential sanctions remains uncertain, as does Musk’s response to this escalating legal challenge.