A federal judge has denied the U.S. Securities and Exchange Commission’s (SEC) request to sanction Elon Musk following his failure to appear for court-ordered testimony in the SEC’s investigation into his $44 billion acquisition of Twitter. U.S. District Judge Jacqueline Scott Corley, ruling on Friday, stated that sanctions were unnecessary after Musk provided his testimony on October 3 and agreed to cover the SEC’s $2,923 in travel costs.
In her ruling, Judge Corley noted that the SEC’s request was moot, as there was no longer a meaningful remedy for the court to grant. She further explained that since Musk had fulfilled his court obligations by testifying, the matter was effectively resolved.
The SEC had initially sought sanctions against Musk for missing a September 10 testimony deadline, arguing that his absence violated a May 31 court order. The SEC contended that simply reimbursing the agency for travel expenses would not serve as an adequate deterrent, particularly for someone with Musk’s wealth.
Musk, who is worth an estimated $321.7 billion, testified on October 3, fulfilling the court’s order. His legal team had argued that the absence was due to his business commitments, as he was overseeing the launch of SpaceX’s Polaris Dawn mission in Florida on the scheduled date.
The SEC is investigating whether Musk violated securities laws in early 2022 by delaying the disclosure of his growing stake in Twitter. The agency alleges that Musk’s failure to disclose his purchase of a significant amount of Twitter stock for more than 10 days may have allowed him to acquire shares at a lower price, before making his public offer to buy the company.
In previous statements, Musk admitted he misunderstood the SEC’s disclosure rules but emphasized that “all indications” suggested he made an honest mistake. In 2018, Musk was also sued by the SEC over his tweets about taking Tesla private. He settled that lawsuit by paying a $20 million fine and agreeing to allow Tesla’s legal team to review some of his social media posts in advance.
Despite the SEC’s investigation and the legal challenges Musk faces, his businesses—Tesla, SpaceX, and Twitter—continue to thrive, with Musk remaining one of the wealthiest individuals in the world. However, the SEC’s probe into his Twitter acquisition continues, and the legal fallout from his actions may still have lasting effects.
The case is titled SEC v. Musk, U.S. District Court for the Northern District of California, No. 23-mc-80253.
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