After the U.S. Securities and Exchange Commission (SEC) sued Elon Musk, alleging he failed to testify in its investigation related to his $44-billion takeover of Twitter, the billionaire has hit back. Musk has accused the SEC and the Department of Justice (DOJ) of abusing their regulatory powers for personal and political gain.
Musk’s cry for probe into SEC and DOJ
Taking to social media platform X (formerly Twitter) on Oct. 5, Musk called for an investigation into the SEC and the DOJ. “A comprehensive overhaul of these agencies is sorely needed, along with a commission to take punitive action against those individuals who have abused their regulatory power for personal and political gain.”
Musk’s sharp remarks came in response to a post on X highlighting how the US government has been targeting Musk-led companies. When a social media user asked Musk what are the chances of such an investigation ever happening, he said, “I estimate the probability at 100%.”
SEC’s attempt to force testimony out of Musk
The development comes against the backdrop of the SEC’s lawsuit against Musk in federal court in San Francisco. Per the suit filed on Oct. 5, Musk had been summoned by the capital markets regulator for testimony on September 15, 2023. Not only did Musk refuse to comply, but he also raised objections over the testimony location.
Last October, the world’s richest man acquired Twitter for $44 billion – a deal which he previously tried to back out of, but couldn’t after the social media company dragged Musk to court, and forced him to honor the original agreement. Prior to the acquisition, Musk had bought a 9.2% stake in Twitter, becoming the largest shareholder in the company.
Now, the SEC is investigating whether Musk’s purchase of the 9.2% Twitter shares violated the securities law. Wall Street’s top cop argues that Musk failed to comply with rules which mandate any investor who acquires more than 5% interest in a public company to disclose the purchase within 10 days.
X’s Crypto game in on
At a time when the SEC has waged a war against the crypto industry, the lawsuit against Musk could have far-reaching consequences for the crypto community and the broader public. Speculation is rife that Musk wants to incorporate crypto payments into X. In August, Todayq News reported that the billionaire has also been granted a currency transmitter license from Rhode Island’s regulator.
Notably, Musk is not the only one who has taken shots at the SEC recently. Earlier this week, venture capital firm Paradigm slammed the SEC for bypassing the standard rulemaking process in its lawsuit against Binance. Furthermore, crypto proponents believe the SEC’s aggressive stance against crypto could stifle blockchain innovation within the U.S.
