Elon Musk facing federal investigation over his conduct in Twitter deal, according to court filing

Everytime it appears as if the battle between Elon Musk and Twitter over a takeover of the social media platform is over, more controversial details emerge. First Musk faced resistance from Twitter stakeholders while trying to buy it, then he backtracked and shareholders went to court to force Musk to seal the deal. Finally this month the Tesla CEO and SpaceX founder agreed to acquire the microblogging site, but now a court filing by Twitter has revealed that Musk is facing a federal investigation.

What is he being investigating for?

Although details about the probe against the tech entrepreneur are yet to be revealed, authorities are looking into Musk’s conduct during the deal. Twitter has asked for access to communications exchanged between Musk and federal investigators through his counsel. His lawyers had submitted a privilege log in court, containing an email to the US Securities and Exchange Commission, but was to be kept confidential. As the acquisition is finally going through, Twitter wants more clarity in the matter.

Musk’s behaviour under scrutiny?

Musk had reportedly been questioned by the US SEC over a delay in disclosing his stake in Twitter which had surpassed the 5 per cent mark back in March 2022. He had missed the deadline to reveal it by 10 days, but that allowed him to scale up his stake to 9 per cent without other stakeholders noticing. A timely disclosure would’ve alerted other shareholders that Musk was trying to gain more influence over Twitter by increasing his stake.

Not his first run in with authorities

The federal investigation revealed by Twitter’s filing won’t be a first for Musk, who had been charged with securities fraud over a misleading tweet in 2018. Through the platform, the Tesla CEO had hinted to his 22 million followers, that he could be taking the firm private at $420 per share. He had made the public announcement about securing funds for it without discussing details with financing partners, and agreed to pay $20 million in fines to settle the matter.