(Bloomberg) — The US Securities Exchange Commission says Elon Musk’s offer to pay $2,923 isn’t enough for standing up three agency lawyers who were set to question him last month in an investigation of his 2022 purchase of Twitter Inc.
Most Read from Bloomberg
Instead of rubber-stamping the billionaire’s proposal to reimburse the agency for flying the lawyers to Los Angeles in September while he was off in Florida to watch a SpaceX rocket launch, a judge should formally sanction Musk so he realizes his conduct is not a “trivial matter,” the SEC said Friday in a court filing.
The regulator is seeking information about Musk’s purchases of Twitter stock and statements about his investments before he spent $44 billion to buy the social-media platform, which he later rebranded as X.
Merely “ordering reimbursement of travel costs would not serve as a real deterrent for many individuals considering violating a court order — much less someone of Musk’s extraordinary means,” the SEC said.
But a lawyer for Musk, who is the world’s richest person with a net worth of $276.5 billion, says US District Judge Jacqueline Scott Corley’s options are limited now that he’s offered to pony up the $2,923. Corley repeatedly ordered Musk to cooperate with the agency after he initially did two interviews but refused to participate in a third round of questioning. Musk finally met with the SEC lawyers to give testimony on Oct. 3.
“It is dubious whether the court can consider a request for sanctions given Mr. Musk’s agreement to provide the relief the SEC seeks,” Musk lawyer Alex Spiro wrote to the judge Friday.
The SEC argues Musk needs to be held accountable for skipping the scheduled September deposition — which he had argued was excusable because he had an urgent obligation to attend the Cape Canaveral launch. The agency asked Corley to “make clear that Musk’s failure to appear was not a trivial matter, and appropriately tether the monetary sanction to his misconduct.”
The SEC declined to comment beyond its court filing. Spiro didn’t immediately respond to a request for comment.
The case is Securities and Exchange Commission v. Musk, 23-mc-80253, US District Court, Northern District of California (San Francisco).
–With assistance from Nicola M. White and Rachel Graf.
Most Read from Bloomberg Businessweek