Twitter has said Elon Musk is under investigation by US authorities for “his conduct in connection with the acquisition” of the social media company, according to a court filing.
Lawyers for the social media company said that they had demanded copies of “substantive correspondence” between Mr Musk and federal authorities over the alleged investigation “months ago”, but his team failed to produce it.
The documents at issue include a May 13th email to the Securities and Exchange Commission and a slide presentation to the Federal Trade Commission, according to a letter to judge Kathaleen McCormick of the Delaware Court of Chancery. The letter was sent last week but only filed in court on Thursday.
The company is attempting to resolve a legal battle with Mr Musk and close a deal to sell itself to the Tesla chief executive. Mr Musk first agreed to buy the social media platform in April for $44 billion (€45bn) before attempting to pull out of the deal citing concerns over fake accounts, sparking a bitter legal dispute.
Parties’ general election manifestos struggle to make the figures add up
On his return to Web Summit, the often outspoken chief executive Paddy Cosgrave is now an epitome of caution
Surviving a shake-up: is restructuring ever good for staff?
The Irish Times Business Person of the Month: Dalton Philips, Greencore
However, he revived his bid last week, prompting wrangling over the final shape of the sale. Judge McCormick last week stayed the legal action until October 28th to give both sides the opportunity to come to a resolution.
In a text message a lawyer for Mr Musk, Alex Spiro, said Twitter’s letter was “misdirection”. Twitter declined to comment.
Before unveiling his initial bid for the company, Mr Musk had accumulated a 9.2 per cent stake in Twitter in a series of share purchases that began as early as January. That was more than the 5 per cent threshold that triggers disclosure requirements.
Lawyers for Twitter previously claimed that Mr Musk breached securities regulations by failing to make a timely disclosure of the transaction, which they said was due by March 24th. “Not until April 4th, 2022, did Musk finally disclose his holdings, which made him Twitter’s largest stockholder,” lawyers for the company wrote in their complaint against Mr Musk.
In April the SEC sent a letter to Mr Musk asking him why he did not appear to have made the appropriate filing on time and why he had initially indicated that he was going to be a passive investor.
Twitter and Mr Musk have repeatedly accused each other of not being forthcoming in providing internal communications relevant to the trial.
According to one person familiar with the situation, Twitter and Musk’s team are working on closing the deal in advance of the October 28th deadline. If the deal does not close, the judge has said she will set a trial date for November. – The Financial Times
