Elon Musk Under Scrutiny: Will He Attend Court Hearing on X Takeover?

Elon Musk is facing mounting pressure from regulators as he is scheduled to answer questions regarding his acquisition of Twitter, now rebranded as X. A federal court has mandated his appearance this Thursday, and the financial community is left wondering: Will he show up?

Last month, Musk missed a critical court appearance at the U.S. Securities and Exchange Commission (SEC) in Los Angeles, raising further doubts about his compliance. This upcoming interview is part of an extensive investigation to determine if Musk delayed disclosing his growing stake in Twitter prior to the platform’s acquisition in 2022—a potential violation of securities laws.

The billionaire has previously acknowledged that the delay in disclosure was an oversight. However, the SEC is pressing for his appearance this Thursday, suggesting possible sanctions if he fails to comply.

During the September 10 court hearing, the SEC reported spending significant resources to send three attorneys—two from San Francisco and one from Washington, D.C.—to conduct Musk’s sworn deposition. Yet, just three hours before the scheduled meeting, Musk’s legal team informed the SEC that he would be unable to attend due to an urgent trip to the East Coast for a “high-risk” SpaceX launch.

Interestingly, SpaceX had announced the launch timing two days before the deposition was set, and Musk himself mentioned at a conference the day before that he intended to travel to Florida if weather conditions permitted. The SEC claims that Musk did not communicate these plans, only for the government lawyers to discover the information post-factum.

In light of the missed meeting, the SEC rescheduled the deposition and subsequently requested a federal court to ensure Musk’s attendance this time. Musk has already given testimony on two occasions since the SEC initiated its inquiry into his $44 billion acquisition of Twitter. The investigation is examining whether his stock purchases leading up to the acquisition and his public statements regarding these investments violated any securities regulations.

Musk, however, has refused to testify a third time, with his legal representatives accusing the SEC of harassment. In October, the SEC escalated its request to the court for a ruling compelling Musk to provide more testimony.

SEC lawyers have criticized Musk’s absence from the previous hearing as “gamesmanship.” They have urged U.S. District Judge Jacqueline Corley to impose penalties should he skip the upcoming meeting, emphasizing the necessity of discouraging such behavior. They also pointed out that Musk should have sought the SEC’s approval or a court order to reschedule his deposition.

In response, Musk’s attorney, Alex Spiro from the law firm Quinn Emanuel, asserted that his client has been cooperative throughout the investigation. He cited the hundreds of documents produced by Musk, along with his participation in two depositions and additional testimony from individuals associated with him.

Spiro also noted that Musk’s legal team had made the trip to Los Angeles for the previous deposition and promptly notified the SEC of the emergency that caused his absence. Despite the ongoing tensions, the SEC declined to comment directly when approached by the media.

However, in a recent court filing, SEC attorney Robin Andrews urged Judge Corley to take a firm stance against Musk, arguing that the court must make it clear that any further attempts at “gamesmanship and delay tactics” are unacceptable.

As the date of the hearing approaches, all eyes are on Musk. His attendance—or lack thereof—could have significant implications for his ongoing legal troubles and the broader financial landscape as regulators continue to scrutinize high-profile tech figures and their compliance with securities laws. Whether Musk will heed the court’s directive remains to be seen, but the stakes have never been higher.