Elon Musk Didn’t Show Up to Testify in Investigation into His $44 Billion Twitter Takeover. Now the SEC Wants to Sanction Him

(CNN) – The Securities and Exchange Commission (SEC) intends to impose sanctions on Elon Musk for failing to testify in an investigation into his acquisition of Twitter, now called X, the regulator said in a lawsuit on Friday.

Earlier this year, a federal judge ordered Musk to testify as part of the Securities and Exchange Commission’s investigation into the billionaire’s $44 billion takeover deal. The agency is examining whether Musk followed the law in disclosing his Twitter stock purchases and whether his statements about the deal were misleading.

After some initial scheduling adjustments, the parties agreed that Musk would testify on Sept. 10, and SEC lawyers flew to Los Angeles to take his testimony, according to a court filing Friday. But three hours before his testimony was to begin, Musk’s lawyer told the SEC that his client, who also runs SpaceX, had an urgent trip to the East Coast for the Polaris Dawn mission launch and would not be able to attend the testimony or reschedule it for the following day, according to the document.

The two sides then struggled to find time to reschedule the testimony before reaching a date in early October, according to the document.

The SEC alleges that Musk violated a court order requiring Musk to “seek” written approval from the SEC or a court order “to modify the timing of his testimony,” which the SEC alleges he failed to do before failing to appear on September 10.

“Musk’s excuse itself smacks of manipulation,” the SEC said in the filing. “SpaceX had already announced that it was targeting a Tuesday morning launch two days earlier… As CEO of the company, Musk certainly knew by then that SpaceX was targeting the morning of its SEC certification for the launch.”

“Despite this advance knowledge, Musk did not notify the SEC of his intention to attend the launch until three hours before his testimony began, and after the SEC had spent thousands of dollars to fly three lawyers to Los Angeles,” he continued.

Musk has previously tried to resist efforts to testify again in the investigation, saying he has already done so twice.

The SEC asked the court to impose “significant contingent damages” if Musk fails to appear on the new October testimony date. The SEC also said it intends to seek sanctions against Musk to recover his travel costs for the canceled testimony and other damages.

In the response document, Musk’s lawyers argued that “the court’s intervention is not necessary, as the parties have already agreed to a new deposition date… Mr. Musk is already subject to an order from this court to appear in court unless an emergency arises that he did not create and could not prevent.”

The document represents just the latest escalation in a long-running tension between Musk and the SEC, which began in 2018 when the agency sued him over a false tweet that he had “funding secured” to take Tesla private.