Elon Musk was sued for alleged fraud case

The US Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk in a court in the Northern District of California, demanding his testimony about the acquisition of Twitter last year. The SEC suspects that Musk may have committed securities fraud in this transaction.

The Tesla CEO and billionaire businessman did not appear at the summons scheduled for September 15, where he was to give a statement as part of the SEC’s investigation into his investment in the social network now known as X. This transaction was closed with a agreement valued at approximately $44 billion.

The lawsuit filed by the SEC alleges that Musk’s continued refusal to comply with the subpoena is hindering and delaying the investigation. Therefore, the SEC asks the court to force Musk to appear before the commission.

Musk’s lawyers had argued that the courthouse in San Francisco (California, USA) was not the appropriate place to testify. However, the lawsuit details that alternative dates were proposed to meet at the SEC offices in Fort Worth (Texas, USA), which are closer to Musk’s current residence in Austin (Texas). Despite these efforts, Musk refused to appear to testify.

Additionally, federal Judge Andrew Carter, sitting in the Southern District Court of New York, rejected Musk’s request to dismiss a class-action lawsuit accusing him of defrauding Twitter investors before acquiring the company.

Musk is alleged to have violated federal regulations by failing to disclose his prior 5% ownership stake in the company, which would have provided him with inside information during the acquisition of the social network. Shareholders suing SpaceX CEO claim Musk would have saved more than $200 million by increasing his stake in Twitter from 5% to 9.2%, resulting in his shares being sold at artificially low prices because of this. strategy.

With Musk’s acquisition of Twitter in April 2022, the social platform’s shares rose 27%, from $39.31 to $49.97.

Musk’s lawyers argued that at the time, Musk was one of the busiest people in the world, running companies like Tesla and SpaceX, and that he failed to report his involvement on Twitter due to an oversight.

K. Tovar

Source: Bancaynegocios

(Referential image source: Souvik Banerjee, Unsplash)

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