Elon Musk has threatened SEC penalties for failing to appear in court

Elon Musk, the CEO of X and various other companies with the letter “X” in their names, is in the crosshairs of regulators after skipping testimony this month in an investigation related to Musk’s takeover of Twitter.

In a filing today, the US Securities and Exchange Commission (SEC) said it intends to seek sanctions against Musk after Musk skipped a Los Angeles court appearance on September 10. According to the filing, Musk did not notify the SEC that he would not be appearing until three hours before his testimony began.

“The court must clarify that Musk’s gamesmanship and delaying tactics must stop,” the filing continued.

Musk instead spent Sept. 10 overseeing the launch of Polaris Dawn, a spacecraft made by his space exploration company, SpaceX, according to the filing.

The SEC’s attorney offered to reschedule Musk’s hearing for the next day, September 11. But Musk’s attorney refused, only agreeing to court dates in October.

The SEC is seeking “reasonable conditional discharge” if Musk does not appear in court in October. The agency has also signaled that it plans to file a punitive action against Musk to recoup its travel expenses through canceled testimony and other benefits. (In the filing, the SEC said it spent “thousands of dollars” to fly three lawyers to Los Angeles for the Sept. 10 hearing.)

Musk’s court-ordered appearance stems from an SEC investigation into whether the billionaire followed the law when disclosing his purchase of Twitter stock before acquiring the company for $44 billion in 2022. The investigation also seeks to reveal whether Musk’s statements about the deal were misleading; The SEC says Musk waited at least 10 days too long to disclose that he was buying Twitter shares.

The investigation is the second time Musk has come under the SEC’s gun in recent years. In 2018, the agency ordered Musk to step down as chairman of Tesla and pay $40 million in penalties for tweets related to Tesla shares that the SEC found to be market manipulation. At the time, Musk called the fraud charges “an act of injustice.”

The SEC also investigated Musk and Tesla over claims about the ability of Tesla’s cars to be “fully self-driving”, and Tesla’s use of company funds to build Musk a “glass house.”

You can read the full application below.

Updated 9/20 at 5:48 pm Pacific: We at first wrote that Musk failed to appear in court in San Francisco. The court was actually in Los Angeles; we have made corrections and regret the mistake.

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