US SEC Sues Musk for "Noncompliance with Subpoena in X Acquisition Investigation"
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, CEO of Tesla, for failing to comply with an investigation related to the acquisition of X (formerly Twitter).
According to major foreign media including The Wall Street Journal (WSJ) on the 5th (local time), the SEC submitted a complaint to the U.S. District Court in San Francisco on the same day, requesting an order for CEO Musk to comply with the investigation regarding the Twitter acquisition.
In the lawsuit documents submitted that day, the SEC mentioned that it notified CEO Musk to appear on the 15th of last month, but he did not show up. The SEC stated that it offered to change the summons location to a place near Musk’s Texas residence, but he refused to appear.
The SEC has been investigating whether CEO Musk violated securities laws and disclosure obligations during the process of acquiring X last year.
He acquired X in October last year for $44 billion (approximately 59 trillion KRW), but has been embroiled in allegations of misappropriating company assets against the interests of Tesla shareholders and failing to comply with disclosure obligations.
CEO Musk has had multiple legal disputes with the SEC in the past over posts he made on X.
In 2018, the SEC filed charges of stock fraud against him, holding him responsible for causing market confusion after he posted on X that he was considering taking Tesla private and then reversed the statement.
Subsequently, Musk and Tesla paid a combined fine of $40 million, and Tesla’s in-house lawyers agreed with the SEC to pre-review some of Musk’s tweets to prevent similar incidents from recurring.
Additionally, in November 2021, CEO Musk posted on X that he might sell 10% of his Tesla shares and conducted a poll asking for opinions on this, after which Tesla’s stock price fell more than 15% over the following week.
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In response, the SEC launched an investigation into whether Musk violated the 2018 agreement, and Musk filed a lawsuit in March last year claiming that the SEC’s actions gagged him and infringed on his freedom of expression, but he lost the case.
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