By Jonathan Stempel
(Reuters) – A federal judge on Friday rejected the U.S. Securities and Exchange Commission’s request for sanctions against Elon Musk after he failed to appear for court-ordered testimony in the regulator’s investigation into its $44 billion takeover of Twitter.
U.S. District Judge Jacqueline Scott Corley in San Francisco said sanctions over Musk’s Sept. 10 absence were unnecessary, after the world’s richest person testified Oct. 3 and agreed to pay the $2,923 SEC travel expense dollars.
Trusted news and daily delights, straight to your inbox
See for yourself — The Yodel is your go-to source for daily news, entertainment and feel-good stories.
“Because current circumstances preclude any opportunity to obtain meaningful relief that the court could grant, the SEC’s request is moot,” Corley wrote.
The SEC had requested a declaration that Musk violated a May 31 court order allowing him to testify.
He added that only having to reimburse travel expenses would not deter many others from ignoring court orders, “let alone someone with the extraordinary means of Elon Musk.”
Musk said he complied with the order by testifying on October 3. Its value is $321.7 billion according to Forbes magazine.
The SEC did not immediately respond to an after-hours request for comment. Musk’s lawyers did not immediately respond to similar requests.
Musk, who counts electric car maker Tesla and rocket company SpaceX among his businesses and is the world’s richest person, traveled to Cape Canaveral in Florida on September 10 to oversee the launch of the Polaris mission Dawn from SpaceX.
The SEC is investigating whether Musk violated securities laws in early 2022 by waiting at least 10 days too long to reveal that he had begun accumulating shares on Twitter.
Critics and some investors said this allowed him to buy shares cheaply before eventually disclosing a 9.2% stake on Twitter, and soon after he offered to buy the entire the company.
In July, Musk said he had misunderstood the SEC’s disclosure rules and that “all indications” suggested he had made a “mistake.”
The SEC also sued Musk in 2018 for his Twitter posts regarding taking Tesla private. He settled that lawsuit by paying a $20 million fine, agreeing to let Tesla’s lawyers review some messages in advance, and resigning as Tesla’s chairman.
The case is SEC v. Musk, United States District Court, Northern District of California, No. 23-mc-80253.
(Reporting by Jonathan Stempel in New York; additional reporting by Ismail Shakil; editing by Chris Reese and Cynthia Osterman)
