Federal Agency’s Letter to Elon Musk Questions Tweet About Twitter Deal

Jack Phillips
By Jack Phillips
July 14, 2022Businessshare
Federal Agency’s Letter to Elon Musk Questions Tweet About Twitter Deal
Elon Musk arrives for the 2022 Met Gala at the Metropolitan Museum of Art in New York on May 2, 2022. (Angela Weiss/AFP via Getty Images)

The U.S. Securities and Exchange Commission asked Tesla CEO Elon Musk for more details related to his Twitter deal, regarding the $44 billion purchase that he recently attempted to pull out of, according to a new regulatory filing issued Thursday.

On May 13, Musk wrote that the Twitter deal was “temporarily on hold” after the billionaire said he requested information on how Twitter determines the number of automated or spam accounts are on its platform. Days later, he wrote that the deal “cannot move forward” unless that information is provided to him.

“The term ‘cannot’ suggests that Mr. Musk and his affiliates are exercising a legal right under the terms of the merger agreement to suspend completion of the acquisition of Twitter or otherwise do not intend to complete the acquisition,” the SEC wrote to Musk, according to the federal agency’s filing Thursday. “Yet, we note that the Schedule 13D has not been amended to reflect the apparent material change that has occurred to the facts previously reported under Item 4 of Schedule 13D.”

Later, the SEC wrote to Musk’s team that it wants a written explanation about why the Schedule 13D filing wasn’t amended following his Twitter post that the deal can’t go ahead.

His lawyers, however, said on June 7 that the 13D was updated several times and “continues to reflect Mr. Musk’s current plans and proposals with respect to the pending acquisition.”

The lawyer added that Musk “does not believe” that the Twitter post required an update to the 13D filing.

“Despite Mr. Musk’s desire to obtain information to evaluate the potential spam and fake accounts, there was no material change to Mr. Musk’s plans and proposals regarding the proposed transaction at such time,” Musk’s response letter continued.

“If you do not respond, we will, consistent with our obligations under the federal securities laws, decide how we will seek to resolve material outstanding comments and complete our review of your filing and your disclosure,” the letter also said. The SEC said it might publicly disclose all correspondence related to Musk’s filing with the agency.

The correspondence between Musk’s team and the SEC came before the tech billionaire last week announced that he is pulling out of the $44 billion deal to acquire Twitter, accusing the firm of violating an agreement on bot accounts. The San Francisco-based social media firm fired back by filing a lawsuit against Musk earlier this week in a bid to force him to complete the merger.

Before Thursday’s SEC filing, the agency in April had asked Musk about the disclosure of his nearly 10 percent stake in the platform. And in 2018, Musk reached a settlement with the SEC over a Twitter post where he claimed to have had funding to take Tesla off the stock market.

From The Epoch Times

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