Thursday, July 18

S.E.C. Sues Elon Musk to Compel Him to Testify on Twitter Purchase

The Securities and Exchange Commission sued Elon Musk on Thursday to force him to testify about his accumulation of shares in Twitter, which the tech billionaire bought last year and has since renamed X.

Mr. Musk quietly bought shares of Twitter between January and April 2022, amassing a 9 percent stake in the company before offering to buy it outright. The S.E.C. has said that Mr. Musk missed a deadline to publicly disclose his purchases of Twitter stock. Investors are required to disclose their stakes within 10 days if they buy more than 5 percent of a company’s shares, but Mr. Musk did not do so, the agency said.

In the lawsuit, filed in U.S. District Court for the Northern District of California, the S.E.C. said that Mr. Musk was subpoenaed to testify last month about his stock purchases but failed to appear. Bloomberg earlier reported the agency’s lawsuit against Mr. Musk.

“The S.E.C. has already taken Mr. Musk’s testimony multiple times in this misguided investigation — enough is enough,” said Alex Spiro, a lawyer for Mr. Musk.

Mr. Musk offered to buy Twitter in April 2022 for roughly $44 billion, then tried to back out of the deal in July of that year. He completed his purchase of the company last October.

His takeover has been the subject of several lawsuits and investigations by the federal authorities. The Federal Trade Commission has probed whether X had the resources to protect users’ privacy after he laid off much of its staff and several senior executives responsible for privacy and security resigned. The agency has also sought to depose Mr. Musk. Former Twitter shareholders have also sued Mr. Musk for fraud in a case related to his belated disclosure of his stake in the company.

Mr. Musk and X’s chief executive, Linda Yaccarino, have been focused on bringing advertisers back to the platform. Many advertisers have been skittish about returning after Mr. Musk relaxed content moderation policies on the site. Ms. Yaccarino on Thursday was set to meet with the bankers who financed Mr. Musk’s acquisition to brief them on X’s financial progress.

Jack Begg contributed research.