The Securities and Exchange Commission (SEC) has urged a federal judge to sanction Tesla Inc. TSLA and SpaceX CEO Elon Musk if he continues to avoid appearing for a deposition.
What Happened: The SEC is probing whether Elon 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, Musk was ordered by the court to appear for a deposition by the financial regulators regarding the Twitter deal.
However, the tech billionaire twice failed to appear before the SEC, first in September 2023 and again last week, in defiance of a clear court order, according to SEC attorney Robin Andrews, reported CNBC.
Andrews has requested the judge to consider sanctions if Musk continues to delay. The SEC also plans to ask the court to hold Musk in “civil contempt” for canceling a deposition on Sept. 10 with only a few hours’ notice.
Musk’s deposition has been rescheduled for early October at an SEC office.
Musk’s attorney, Alex Spiro, responded that “such drastic action would be inappropriate,” adding that Musk and his companies have been cooperating with the SEC in multiple other ongoing investigations.
A user on X shared the news about the SEC’s intent to seek sanctions against Musk, and argued that the tech billionaire “was busy overseeing the launch of SpaceX’s Polaris Dawn mission that day.”
In response, Musk seemingly agreed and described the mission as “our highest-risk astronaut mission ever.”
He noted that stringent weather constraints were only met on the night of the launch.
“The weather constraints on this mission are also extremely high and only cleared that night. I had to make a go vs no-go decision. Their lives came first.”
Why It Matters: Earlier this year in April, the U.S. Supreme Court upheld a 2018 SEC settlement following Musk's claim of having "funding secured" to privatize Tesla, which the SEC deemed false.
Musk has also previously expressed dissatisfaction with the SEC on Lex Fridman‘s podcast, criticizing the agency’s failure to protect retail investors from hedge funds. “Not once did the SEC go after any of the hedge funds who were nonstop shorting and distorting Tesla. Not once,” he stated at the time.
Last year, after the SEC filed a lawsuit against Musk over his Twitter stock purchase, to which Musk responded that a comprehensive overhaul of these agencies is sorely needed.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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