Washington DC:
A judge in the United States has rejected the request of the US Securities and Exchange Commission (SEC) to sanction tech billionaire Elon Musk for skipping a meeting with the regulator, to watch one of his rockets launch. Mr Musk was ordered by a court to meet the SEC officials in September to provide testimony for the regulator’s probe into his USD 44 billion takeover of X (Twitter at the time).
On Friday, US District Judge Jacqueline Scott Corley said there was no need to sanction the billionaire for his absence, as he agreed to reimburse the SEC to cover the airfare of three agency lawyers he stood up in Los Angeles on September 10.
Mr Musk finally complied with the order and met with the SEC lawyers to give testimony on October 3.
“Because the present circumstances forestall any occasion for meaningful relief that the court could grant, the SEC’s request is moot,” Corley wrote in the order.
The order said that having only to repay travel costs would not deter many other people from ignoring court orders, “much less someone of Mr Musk’s extraordinary means.”
The SEC urged the federal judge to impose sanctions on Mr Musk to remind him that flouting her order was not a “trivial matte,” according to a report by Bloomberg.
However, the report said that Mr Musk’s lawyer, Alex Spiro, contested the claim and argued that the billionaire’s failure to show up for the deposition was justified because he had an urgent obligation as the head of SpaceX, and had to travel to Florida for the Cape Canaveral launch of a rocket on a commercial spacewalk mission.
Mr Spiro contended that his client’s voluntary offer to reimburse the agency for USD 2,923 was sufficient. Mr Musk is worth USD 321.7 billion, according to Forbes magazine.
Any statement from Mr Musk’s Lawyers or the SEC was not available at the time of filing this story.
Market Regulator’s Probe
The SEC is investigating whether Musk — whose businesses include electric car maker Tesla and rocket company SpaceX and who is the world’s richest person– violated securities laws in early 2022 by waiting at least 10 days too long to disclose he had begun accumulating Twitter stock.
Critics and some investors have said this let him buy shares cheaply before he eventually disclosed a 9.2 per cent Twitter stake, and shortly thereafter offered to buy the whole company.
In July, Mr Musk said he misunderstood SEC disclosure rules and that “all indications” suggested he made a “mistake.”
The SEC also sued Mr Musk in 2018 over his Twitter posts about taking Tesla private. He settled that lawsuit by paying a USD 20 million fine, agreeing to let Tesla lawyers review some posts in advance and stepping down as Tesla’s chairman.
