- Elon Musk was under investigation by federal authorities.
- The Investigation was based on his $44 billion deal with Twitter.
- The filing did not particularly mention the reason for the investigation.
Tesla (NASDAQ:TSLA) Founder Elon Musk is being investigated by federal authorities over his conduct in his $44 billion takeover deal for Twitter Inc (NYSE:TWTR)., as told by a social media court filing released on Thursday.
Though the filing detailed that Elon Musk was under investigation, it didn’t explain the exact reasons for the case and which authority was conducting the investigation.
In July, Musk who had been planning to buy Twitter, suddenly terminated the deal alleging that Twitter violated their mutual purchase agreement by misrepresenting the number of spam and fake bot accounts on its platform.
Soon after Musk withdrew himself from the plan, the market saw a sharp decline and consequently, Twitter accused Musk of using bots as a pretext to exit the deal.
The court filing asked Delaware judge Kathaleen McCormick (NYSE:MKC) to order Musk and his legal team to produce legal documents for closing his deal with Twitter. Later, the Twitter board accused him of not submitting any draft communications with the Securities and Exchange Commission.
Meanwhile, Musk and his attorneys claimed “investigative privilege” while refusing to submit the legal documents asked by Twitter to close Musk’s deal.
In response to the Twitter filing, Musk’s lawyer Alex Spiro commented that the filing aims only at digressing from its own legal issues. Previously, the ex-Twitter network security executive Peiter Zatko, made allegations on Twitter for its illegal activities including “Twitter’s tracking and measurement for user engagement”.
Spiro added that the court filing was a “misdirection” and asserted that “it’s Twitter’s executives that are under federal investigation”.
Consequently, the SEC questioned Musk’s comments on the acquisition of Twitter. Questions were raised on the late disclosure of the 9% stake that he had built up before closing his connections with Twitter.
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