Elon Musk is Under Federal Investigation, Twitter Says in Court Filing
Last Updated on: 14th October 2022, 12:21 pm
Twitter has filed a court document that reveals that billionaire entrepreneur and Tesla CEO Elon Musk is under federal investigation for his $44 billion takeover of the social media company. According to the court filing, the Department of Justice is investigating whether or not the transaction was in violation of the Foreign Corrupt Practices Act.
Twitter has filed a motion in federal court to compel attorneys for Elon Musk to turn over communications with federal authorities. The motion comes after months of Twitter asking for the documents, but Musk’s attorneys have yet to provide them.
In the motion, Twitter says that “without [the communications], Twitter is left with no way to determine whether the Government’s allegations are accurate or not.”
Last month, Musk’s attorneys provided a “privilege log” identifying documents to be withheld from discovery. The log referenced drafts of a May 13 email to the U.S. Securities and Exchange Commission and a slide presentation to the Federal Trade Commission.
Twitter says the documents could be used to “embarrass, harm, or delay” Musk.
But the company is going to fight to keep them hidden.
The company said in the court filing that the game of “hide the ball” must end.
Halted The Litigation To Allow The Two Companies To Close The Deal
According to a filing made in federal court on Thursday, Elon Musk’s Twitter account is being investigated by the Federal Trade Commission (FTC) for possible violations of the company’s terms of service.
Twitter filed a court request on Oct. 6 to end the pending takeover deal with Tesla Motors Inc. and CEO Elon Musk. The request was made the same day that a Delaware judge halted the litigation to allow the two companies to close the deal.
Twitter’s filing states that the SEC has questioned Musk’s comments about the Twitter acquisition. In April, the SEC asked Musk whether the disclosure of his 9% Twitter stake was late and why it indicated that he intended to be a passive shareholder. Musk later refiled the disclosure to indicate he was an active investor.
The SEC’s questions about Musk’s Twitter disclosure suggest that it is looking into the matter. The SEC has not yet made any formal charges against Musk, but the questions suggest that it is considering doing so.
The Twitter deal would have given Tesla ownership of the social media platform and given Musk a significant share of the voting rights in the company. The deal was first announced in February and was subject to regulatory reviews in both the US and Europe.
Public Filing To Reflect His Intention To Suspend Or Abandon The Deal
In June, the SEC asked Elon Musk in a letter whether he should have amended his public filing to reflect his intention to suspend or abandon the deal. The SEC and FTC did not immediately respond to requests for comment.
Musk’s Twitter account responded on Thursday, claiming in a court filing that the company was legally required to do so.
Twitter filed a motion to dismiss a lawsuit brought by the SEC, arguing that the company was not obligated to disclose the information. The SEC has accused Musk of fraud for not disclosing his plan to suspend the deal.
