A federal judge dismissed the U.S. Securities and Exchange Commission's (SEC) request to penalize Elon Musk for skipping a court-ordered deposition in its investigation into his $44 billion acquisition of Twitter, now known as X.
What Happened: On Friday, Judge Jacqueline Scott Corley of the U.S. District Court in San Francisco determined that sanctions were unwarranted after Musk complied by testifying on Oct. 3 and agreed to reimburse the SEC's travel costs of $2,923, reports Reuters.
The SEC sought sanctions for Musk's failure to attend a Sept. 10 deposition as ordered, contending that merely covering travel costs would not deter individuals from ignoring court directives, particularly someone of Musk's financial stature. According to Forbes, Musk's net worth stands at $321.7 billion.
"Because the present circumstances forestall any occasion for meaningful relief that the court could grant, the SEC's request is moot," Corley wrote in the verdict.
Musk defended his actions, stating he had fulfilled the court's requirements by testifying in October. On Sept. 10, he was in Cape Canaveral, Florida, overseeing SpaceX's Polaris Dawn mission.
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The SEC is probing whether Musk violated securities regulations by delaying disclosure of his Twitter stock purchases in early 2022.
After the decision, Musk expressed his triumph on X . He responded to a post from a user who applauded his success against the SEC. Musk responded to the user saying, "SEC. The middle word is definitely ‘Elon's,' but I can never remember what the other two words stand for."
The regulator claims Musk waited at least 10 days longer than required, allowing him to acquire shares at lower prices before revealing his 9.2% stake and later announcing plans to buy the platform outright.
In July, Musk admitted misunderstanding SEC disclosure rules, calling his actions a "mistake."
What It Matters: This is not Musk's first legal clash with the SEC. In 2018, the agency sued him over Twitter posts about taking Tesla Inc. private. Musk settled by paying a $20 million fine, stepping down as Tesla's chairman, and agreeing to have company lawyers vet certain tweets in advance.
The case, SEC v. Musk, is being heard in the U.S. District Court for the Northern District of California.
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