July 16, 2024
Elon Musk calls for SEC overhaul after lawsuit over $44B Twitter/X deal.
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Elon Musk Calls for SEC Overhaul Amid Legal Battle Over Twitter Purchase

Elon Musk has urged for a significant revamp of the United States Securities and Exchange Commission (SEC) shortly after the SEC filed a lawsuit against him, alleging his failure to testify in their investigation into his $44-billion Twitter (now X) acquisition last October.

The SEC is currently looking into whether Musk’s purchase violated securities laws, and a recent filing by the SEC in a California District Court on October 5th seeks to compel Musk to comply with a previous SEC subpoena.

In a post on X on the same day, Musk suggested that both the SEC and the U.S. Department of Justice should be the subjects of an investigation instead. He stated by saying that 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 also expressed his anticipation for this overhaul to occur in response to a post detailing various actions taken by the U.S. government against companies led by Musk. When asked by an X user about the likelihood of such an investigation happening, Musk responded by stating that he estimates the probability at 100%.

According to the SEC, they subpoenaed Musk in May 2023 and required him to provide testimony at their San Francisco office on September 15th, to which Musk initially agreed, as stated in the filing. However, two days before the scheduled appearance, Musk informed the SEC that he would not testify and raised several objections, which the SEC described as spurious.

The SEC claimed that they attempted to negotiate an alternative time and location for Musk’s testimony in good faith, but Musk flatly refused to cooperate. Furthermore, the SEC argued that Musk’s objections had no legal merit, stating that none of Musk’s objections has any legal validity and that he has no justifiable excuse for his non-compliance with the SEC’s subpoena.

X is one of the most popular social media platforms within the cryptocurrency community, with discussions often centered around the SEC’s regulatory approach to the crypto industry. In recent months, Musk has been exploring the integration of cryptocurrency payments on X, having obtained a currency transmitter license from Rhode Island’s regulator in late August. Musk has a history of publicly criticizing the SEC, with his clear stance on the regulator evident in a December 2018 interview with 60 Minutes when he stated saying that he does not respect the SEC.

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