The Blubber

The U.S. Securities and Exchange Commission (SEC) announced on Friday that it plans to seek sanctions against Elon Musk for failing to appear for court-ordered testimony related to its investigation into his $44 billion acquisition of Twitter.

In a filing in San Francisco federal court, the SEC stated it would file a motion seeking an order requiring Musk to explain why he should not be held in civil contempt. The SEC noted that Musk notified the regulator only three hours before the scheduled testimony on September 10 that he would not attend.

Musk, who runs Tesla, SpaceX, and other ventures, was in Florida that day overseeing the launch of SpaceX's Polaris Dawn mission. However, the SEC argued that as SpaceX’s chief technical officer, Musk "surely was already aware" of the launch schedule, which had been discussed two days prior. The SEC claimed that Musk's actions violated a May 31 court order that required his testimony.

"Musk’s excuse reeks of gamesmanship," SEC attorney Robin Andrews wrote, urging the court to put an end to Musk’s delaying tactics.

Musk's attorney, Alex Spiro, called the proposed sanctions "drastic" and unnecessary. He argued that Musk's absence from the launch could have put astronauts’ lives at risk, and that the testimony had already been rescheduled for October 3.

Spiro added that Musk’s failure to appear on September 10 was due to an "emergency" beyond his control, and there was no reason to believe a similar situation would arise again.

An SEC spokesperson declined to comment, but the agency expressed concern in the court filing that Musk might again fail to appear on October 3.

The SEC is investigating whether Musk broke securities laws in early 2022 when he began accumulating Twitter shares. He has faced criticism, including from Twitter shareholders, for waiting at least 10 days too long to disclose his stock purchases. According to securities laws, investors must disclose once their ownership of a public company reaches 5%. Musk ultimately revealed a 9.2% stake in Twitter before offering to buy the entire company.

In July, Musk claimed he misunderstood SEC disclosure rules and that his delay was an "unintentional mistake." The SEC had sued Musk last October after he missed a previously scheduled interview at their San Francisco office.

Musk has frequently clashed with the SEC, accusing the agency of "harassment" through its subpoenas. His disputes with the regulator date back to 2018, when the SEC sued him over tweets about taking Tesla private.