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The US Securities and Exchange Commission has asked Elon Musk to explain an apparent delay in reporting his Twitter stock purchases, according to the agency’s announcement on Friday, raising the stakes in his tumultuous bid for the platform.
Musk bought 73.5 million shares of Twitter in early April and launched a hostile takeover effort less than two weeks later.
He went on to make a $44 billion contract to buy the San Francisco-based corporation, but has subsequently offered conflicting signals about how serious he is about carrying it out.
Musk received a letter from the Securities and Exchange Commission (SEC) asking him to explain why he didn’t report his increasing position in Twitter within the minimum 10-day period, especially if he intended to buy the firm.
In the letter dated April 4, regulators added, “Your response should address, among other things, your recent public statements on the Twitter platform criticising Twitter, including statements questioning whether Twitter rigorously conforms to free speech principles.”
Requests for response from Musk and the SEC went unanswered right away.
The Tesla CEO is a prolific Twitter user, routinely making heated and contentious statements about topics or other prominent figures, as well as witty or business-related comments.
After an alleged attempt to take Tesla private in 2018 went through, he clashed with federal securities officials, who cracked down on his social media use.
Following his August 2018 tweet saying money was “secured” to take Tesla private, Musk has invoked the right to free speech as a driving force for his efforts to overturn a deal with the SEC that restricts his usage of the social media site.
Musk is also facing a lawsuit filed this week accusing him of artificially depressing the price of Twitter’s stock in order to either get out of his acquisition attempt or negotiate a better deal.
According to the lawsuit, Musk tweeted and said things to cast doubt on the contract, which has roiled Twitter for weeks.
According to the complaint, “Musk then proceeded to make statements, send tweets, and engage in activity meant to cast doubt on the agreement and push Twitter’s stock down significantly.”
The suit claimed that his goal was to create leverage so that he could either get Twitter for a lower price or back out of the agreement without consequence.
