Devendra Kumar
A US judge has ordered Elon Musk to testify for a third time in connection with the Securities and Exchange Commission’s investigation into his purchase of Twitter, now known as X, in 2022. The development follows a court hearing last December, during which Judge Laurel Beeler indicated that she would issue an order if the parties failed to agree on a date and location for Musk’s testimony. Initially, the parties had reached an agreement, but ultimately Musk did not appear and refused to comply with the subpoena, citing the investigation as baseless and harassing, and arguing that the SEC was seeking irrelevant information.
Musk’s team contended that the subpoena exceeded the SEC’s authority, as it was not issued by an officer appointed by the President, a court, or the head of a department, as required by the US Constitution. Judge Beeler disagreed, ruling that the court would enforce the SEC’s subpoena and that the testimony was not unduly burdensome for Musk. The SEC had offered Musk the option to give evidence in Texas, where he resides, and the agency is conducting a fact-finding investigation into the period before Musk’s Twitter takeover, when the San Francisco-based social media company was still publicly traded.
The SEC has not concluded any federal securities laws had been violated, and the agency has received thousands of new documents from various parties, including hundreds from Musk himself. Musk closed his $44 billion agreement to buy Twitter and take it private in October 2022, after a month-long legal battle with the social media company’s previous leadership. The SEC’s investigation is ongoing, and it is unclear what the agency hopes to find or achieve through Musk’s testimony. However, the move suggests that the SEC is taking a close look at the deal and is seeking to gather as much information as possible to inform its findings.
In the past, Musk has already given evidence in the case twice, but the SEC’s receipt of additional documents has necessitated his appearance for a third time. The judge’s order is a significant development in the case, as it signals that the court is committed to enforcing the SEC’s subpoena and obtaining evidence from Musk. The outcome of the investigation and the consequences for Musk, if any, remain uncertain, but the recent developments suggest that the SEC is determined to thoroughly examine the circumstances surrounding the Twitter purchase.