A federal judge denied the Securities and Exchange Commission’s request Friday to sanction Elon Musk for missing court-ordered testimony, ruling that the Tesla CEO’s subsequent compliance and reimbursement of travel costs rendered the matter moot.
U.S. District Judge Jacqueline Scott Corley determined that sanctions were unnecessary after Musk, the world’s richest person with a net worth of $321.7 billion according to Forbes, testified on October 3 and agreed to pay the SEC’s $2,923 travel expenses. “Because the present circumstances forestall any occasion for meaningful relief that the court could grant, the SEC’s request is moot,” Corley wrote.
The SEC had sought a formal declaration that Musk violated a May 31 court order when he failed to appear for testimony on September 10, arguing that merely requiring travel cost reimbursement would not deter future noncompliance, “much less someone of Musk’s extraordinary means.” Musk had cited his presence at SpaceX’s Polaris Dawn mission launch at Cape Canaveral for his absence.
The regulator is investigating whether Musk violated securities laws in early 2022 by delaying disclosure of his Twitter stock accumulation, potentially allowing him to acquire shares at lower prices before revealing his 9.2% stake and subsequent $44 billion takeover bid. Musk acknowledged in July that he had misunderstood SEC disclosure rules, saying “all indications” suggested he made a “mistake.”
This case follows Musk’s previous SEC settlement in 2018 over tweets about taking Tesla private, which resulted in a $20 million fine, his resignation as Tesla chairman, and an agreement to have company lawyers review certain social media posts.
