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Monday, April 15, 2024

Elon Musk under federal investigations over Twitter deal

Elon Musk is being investigated by federal authorities over his conduct in his $44 billion takeover deal for Twitter Inc (TWTR.N), the social media company said in a court filing released.

Elon Musk is under a federal investigation related to his $44bn takeover of Twitter, the social media company has said in a court filing made public.

While the filing said he was under investigation, it did not say what the focus was, or which federal authorities were investigating.

Twitter, which sued Musk in July to force him to close the deal, said attorneys for the Tesla CEO had claimed “investigative privilege” when refusing to hand over documents it had sought.

Read more: Elon Musk ready to buy Twitter again, build ‘X’ app

In late September, Musk’s attorneys provided a “privilege log” identifying documents to be withheld. The log referenced drafts of a 13 May email to the US Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission (FTC), Twitter said.

“This game of ‘hide the ball’ must end,” the company said in the court filing.

The SEC has previously questioned Musk’s comments about the Twitter acquisition. In April, the SEC asked Musk whether the disclosure of his 9% Twitter stake was late and why it indicated that he intended to be a passive shareholder. Musk later refiled the disclosure to indicate he was an active investor.

In June, the SEC asked Musk in a letter whether he should have amended his public filing to reflect his intention to suspend or abandon the deal.

The SEC and FTC did not immediately respond to requests for comment.

Alex Spiro, an attorney for Musk, told Reuters that Twitter’s court filing was a “misdirection … It is Twitter’s executives that are under federal investigation.”

Read more: Elon Musk sells Tesla shares due to a possible coerced Twitter deal

Twitter declined to comment on Spiro’s statement. It also declined to comment, when asked by Reuters, about its understanding of the nature of the investigation into Musk.

The filing comes as the months-long saga of Musk’s proposed Twitter purchase continues, during which the billionaire proposed a takeover, went back on the deal, and then was sued by Twitter to stick to his word.

Musk’s side then said he would go ahead with the deal, days before a trial was set to take place to force the purchase through. Musk is supposed to be securing financing to complete the purchase.