SEC criticizes Elon Musk for attending SpaceX rocket launch in absentia, plans sanctions

The U.S. Securities and Exchange Commission (SEC) criticized Elon Musk for missing his trial over his acquisition of Twitter in 2022 to attend a SpaceX rocket launch, Bloomberg reported, citing a filing from a federal court in San Francisco.

The documents show that Musk’s lawyer Alex Spiro informed the court that the tech billionaire missed the September 10 hearing because he was at the Cape Canaveral launch site in Florida for a mission. The report added that Musk had previously ignored a request to complete his deposition in Los Angeles (LA) and the September date was set after U.S. District Judge Jacqueline Corley ordered him to cooperate.

In May, Judge Coley directed Musk to appear again for an SEC deposition and warned him not to postpone or reschedule his testimony unless circumstances arose that he “did not cause or could not have avoided.”

The case is titled “SEC v. Musk” and will be heard in the U.S. District Court for the Northern District of California (San Francisco).

SEC seeks sanctions against Musk for “manipulation”

Three SEC lawyers flew to Los Angeles for the meeting, and documents informed Judge Coley that the regulator now plans to impose sanctions on Musk for his “gameplay,” the report said.

The SEC said the sanctions would require Musk to show cause why he should not be held in civil contempt for notifying himself of his absence only three hours before a scheduled testimony, Reuters reported.

“Musk’s defense itself smacks of manipulativeness,” Robin Andrews, a lawyer for the Securities and Exchange Commission, wrote, according to Reuters. “The court must make clear that Musk’s manipulativeness and delaying tactics must stop.”

Bloomberg said Spiro did not immediately respond to their inquiries.

Musk to attend rocket launch, not SEC meeting, lawyer says

Bloomberg reported that according to the September 20 document, Spiro said: “His duties as SpaceX chief technology officer required him to travel urgently to the East Coast yesterday to participate in the high-risk launch of Polaris Dawn.”

He tried to explain that the launch time was “unpredictable due to weather conditions” and that it was “very important” that Musk be present at the launch ceremony and make the final decision on whether to go ahead with the mission, which follows the recent successful Polaris Dawn space flight that completed the world’s first commercial spacewalk.

According to Reuters, Spiro called the sanctions “overly harsh and unnecessary” because Musk had to testify at the time of the launch because the lives of the astronauts depended on his presence and it constituted an “emergency situation.” He added that the testimony had been rescheduled for October 3, adding that there was “no reason to believe that such an emergency situation would occur again.”

SEC’s investigation into Musk

The regulator’s investigation into Musk involves his purchase of Twitter shares and statements about the investment before the $44 billion acquisition of the social media platform, which has since been renamed X.

Investors and other Twitter shareholders claim the billionaire waited 10 days to disclose he was buying stock in the company, which is required by law when investors own 5% of a public company. Musk eventually disclosed his 9.2% stake in Twitter and soon offered to buy the entire company.

Musk accused the SEC of “harassing” him with subpoenas.

(Information provided by Bloomberg and Reuters)