SEC Files Subpoena Enforcement Action Against Elon R. Musk Seeking an Order Compelling his Attendance for Investigative Testimony

The Securities and Exchange Commission (SEC) has officially announced its pursuit of an order compelling Elon Musk to adhere to an investigative subpoena, which he failed to honor. When an individual or entity declines to cooperate with an SEC enforcement subpoena issued under a formal investigation order, the Commission has the authority to initiate a subpoena enforcement action in a federal district court to enforce compliance.

The SEC’s submission to the U.S. District Court for the Northern District of California reveals that the subpoena to Musk pertains to an ongoing SEC investigation. This investigation centers on potential violations of various federal securities laws, specifically related to (a) Musk’s stock purchases in Twitter, Inc. in 2022 and (b) Musk’s statements and SEC filings regarding Twitter during the same period. The SEC is seeking Musk’s testimony to acquire information that it does not currently possess, which is pertinent to its legitimate and lawful investigation.

The filing details that Musk did not attend the scheduled testimony as mandated by the SEC’s investigative subpoena. This is despite the fact that he had previously agreed to testify on an agreed-upon date in September 2023, had been served with the subpoena in May 2023 for his appearance at the SEC’s San Francisco Regional Office on the same date, and had not raised any objections to the subpoena from May 2023 until just two days before the scheduled testimony in September 2023. At that point, Musk notified the SEC of his decision not to attend and presented several unsubstantiated objections for the first time.

The SEC staff’s application seeks a court order that obliges Musk to comply with the subpoena. The outcome of this application depends on the court’s decision. It’s important to note that, as of now, the SEC has not concluded that any individual or entity has violated federal securities laws, and its fact-finding investigation is ongoing.

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