Financial regulators in the US have taken legal action against Elon Musk after the billionaire declined further cooperation in the investigation of his acquisition of Twitter, now rebranded as X.
The Securities and Exchange Commission (SEC) filed a suit, requesting a federal court to compel Musk to comply with their request for a third round of testimony regarding the deal.
Musk's decision to cease cooperation came in response to a letter from his lawyer, Alex Spiro, who accused the SEC of "harassment" and stated, "Unchecked government action is dangerous and the record here is troubling. Mr Musk declines to acquiesce in the Commission's incursions and therefore refuses to appear as you demand."
This lawsuit is the latest episode in an ongoing dispute between Musk and the SEC. Musk has previously publicly expressed his lack of respect for the regulatory body.
The SEC initiated its inquiry into Musk's $44 billion acquisition of X last year. The investigation aims to determine whether Musk's 2022 stock purchases prior to the complete acquisition of the company and his statements regarding these investments violated securities laws.
Musk already provided two half-day sessions of testimony via video conference in July, in compliance with a subpoena from the SEC. The agency argues that an additional session is necessary due to the substantial volume of documents received after those initial meetings.
A letter from Musk's attorney expressed frustration, stating that it was "unclear why the staff requires further time diverting Mr. Musk from his significant obligations to companies and shareholders...Enough is enough."
This is not the first encounter between Musk and the SEC. In 2018, he was charged with investor fraud for a Tweet in which he claimed he had "funding secured" to privatize Tesla, the electric car company he leads. He later settled the charges, relinquishing his role as chairman of the board and agreeing to what was colloquially termed a Twitter sitter—limitations on what he could post about the company on social media.
Musk has consistently sought legal recourse to have these restrictions lifted, most recently in February.
In a separate development, a judge in New York recently ruled that Musk must face a lawsuit from former Twitter investors who allege he defrauded them by not promptly disclosing his share purchases. However, a claim of insider trading was dismissed.