Elon Musk escapes sanctions as US judge rejects SEC request

The dust has not yet settled on Elon Musk's decision to take Twitter private in 2022. The SEC is investigating the $44 billion deal that gave the world's richest man control of the social media site. However, its attempt to sanction Musk for failing to appear for a court-ordered testimony in September 2024 has failed.

US District Judge Jacqueline Scott Corley, sitting in San Francisco, ruled there was no point in imposing further sanctions since Musk already testified on October 3rd. The Tesla CEO also agreed to bear the SEC's travel expenses of $2,923. According to Corley, "Because the present circumstances forestall any occasion for meaningful relief that the court could grant, the SEC's request is moot."

The SEC argued that merely paying travel costs is insufficient deterrence for defaulters, especially when they are as rich as Musk. He sits on a $321.7 billion fortune, according to Forbes.

Musk was at Cape Canaveral in Florida on September 10th, the day of the testimony that he missed. He was supervising the Polaris Dawn space mission launch by his other company, SpaceX. The mission achieved the first commercial spacewalk and set a record for the youngest person to complete a spacewalk.

The SEC is investigating a potential securities law violation related to Musk's failure to report his purchase of Twitter stock within the approved disclosure window. Musk suggested he made a mistake but claimed he misunderstood the disclosure rules.

This is not the first time the SEC has targeted Musk for taking a company private. In 2018, the regulatory body filed a lawsuit based on Musk's Twitter posts about buying out Tesla. Musk agreed to step down as the board chairman and pay a $20 million fine, in addition to having the EV company's lawyers approve some of his posts prior to publication.