Elon Musk must testify in SEC probe of his Twitter takeover

Tesla and SpaceX CEO Elon Musk has to testify in a probe by the U.S. Securities and Exchange Commission concerning his 2022 acquisition of Twitter, a U.S. judge ordered in a court filing out Saturday.

As CNBC previously reported, the SEC is investigating whether Musk, or anyone else, committed securities fraud in 2022 as the billionaire began buying stock in Twitter, and building a stake ahead of his leveraged buyout of the social media company.

Musk closed his acquisition of Twitter in October 2022 in a deal worth roughly $44 billion, and has since rebranded it X.

In the order dated Feb. 10, 2024, federal magistrate judge Laurel Beeler wrote that although Musk and his legal team argued the SEC’s subpoena in this matter amounted to harassment of the billionaire, the federal financial regulator was “within its authority,” and their subpoena was “definite, and seeks relevant information” to their investigation.

The federal financial regulator and Musk now have one week to set a date and location for his testimony.

Musk, his attorney Alex Spiro and the SEC did not immediately respond to requests for comment.

Musk has repeatedly sought to challenge if not strip authority from federal regulatory agencies.

For example, he has asked the U.S. Supreme Court to undo a settlement agreement that he and Tesla struck with the SEC previously. The settlement required Musk to have a “Twitter sitter” approve his tweets about his electric vehicle business before posting them. Musk’s attorneys have argued that the agreement set an unconstitutional condition on Musk and amounts to a violation of his free speech rights.

In another example, Musk-led defense contractor SpaceX sued the National Labor Relations Board after the federal agency filed a complaint against the company alleging the rocket-maker illegally fired employees who signed an open letter critical of Musk. The letter said, among other things, that Musk’s “behavior in the public sphere is a frequent source of distraction and embarrassment for us.” 

SpaceX filed its lawsuit against the NLRB in the U.S. District Court for the Southern District of Texas in Brownsville. Attorneys for SpaceX argued in their suit that the very structure of the federal labor board violates the U.S. Constitution. Their suit resembles another one brought by a former employee of Starbucks against the NLRB, and seeks to prevent the NLRB’s earlier complaint against SpaceX from moving forward.

Read the full order to compel compliance here.