WILMINGTON, Del., Oct 13 (Reuters) – Elon Musk is being investigated by federal authorities over his conduct in his deal to acquire Twitter Inc ( TWTR.N ) for $44 billion, the social media company in a court document released Thursday.
While the filing said it was under investigation, it did not say the exact focus of the probes or which federal authorities are conducting them.
Twitter, which sued Musk in July to force him to close the deal, said lawyers for the Tesla Inc ( TSLA.O ) CEO had claimed “investigative privilege” when they refused to hand over the documents that he had asked for.
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In late September, Musk’s lawyers had provided a “privilege log” identifying the documents to be withheld, Twitter said. The filing referred to drafts of a May 13 email to the US Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission (FTC).
“This game of ‘hide the ball’ must end,” the company said in the court filing.
The court filing, which asked Delaware Judge Kathaleen McCormick to order Musk’s lawyers to provide the documents, was made on Oct. 6, the same day McCormick halted litigation between the two sides after Musk he reversed course and said he would go ahead with the deal.
Alex Spiro, Musk’s lawyer, told Reuters that Twitter’s court filing was a “misdirection” and claimed, “It’s the Twitter executives who are under federal investigation.”
Twitter declined to comment on Spiro’s statement. He also declined to comment when asked by Reuters about his understanding of any investigation into Musk.
The SEC did not immediately respond to a request for comment, and the FTC declined to comment.
The SEC has questioned Musk’s comments about the Twitter acquisition, including whether a 9% stake he had amassed before announcing his bid was disclosed late and why he indicated he intended to be a passive shareholder. Musk later re-disclosed to indicate that 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 Information, a technology news site, reported in April that the FTC was looking into whether Musk failed to comply with the antitrust reporting requirement related to an investor’s intentions to be a passive or active shareholder.
Twitter said in June, however, that the acquisition deal with Musk had approved an antitrust waiting period for review by the FTC and the US Department of Justice. Read more
McCormick has given Musk until October 28 to close the acquisition. If agreement is not reached then, a trial date will be set for November.
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Reporting by Tom Hals in Wilmington, Delaware, Sheila Dang in Dallas and Hyunjoo Jin in San Francisco; Editing by Peter Henderson and Edwina Gibbs
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Tom Hals
Thomson Reuters
Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles on everything from government policy to corporate deal-making.