Elon Musk is under federal investigation, Twitter says in court filing

WILMINGTON, Delaware, Oct 13 (Reuters) – Elon Musk is being investigated by federal authorities over his conduct in connection with his $44 billion takeover for Twitter Inc. (TWTR.N)the social media company said in a court filing released Thursday.

While the filing said it was under investigation, it did not say what the exact purpose of the investigations was and which federal authorities were conducting them.

Twitter, which sued Musk in July to force him into the deal, said Tesla Inc. (TSLA.O) The CEO had claimed “investigative privilege” by refusing to hand over the documents he had requested.

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In late September, Musk’s attorneys had provided a “privilege log” identifying the documents to be withheld, Twitter said. The newspaper was referring to drafts of a May 13 email to the U.S. Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission (FTC).

The court filing, which asked a Delaware judge to order Musk’s lawyers to provide the documents, was filed on October 6 – the same day the judge stayed the litigation between the two sides after Musk reversed course and said he would proceed with the deal.

“This ‘hide the ball’ game must stop,” the company said in the court filing.

Alex Spiro, a lawyer for Musk, told Reuters that Twitter’s court filing was a “misdirection”. Twitter declined to comment on Spiro’s response and questions from Reuters about its understanding of any investigation into Musk.

The SEC did not immediately respond to request for comment, and the FTC declined to comment.

The SEC questioned Musk’s comments on the Twitter acquisition. In April, the SEC asked Musk if disclosing his 9% stake on Twitter was late and why it indicated he intended to be a passive shareholder. Musk then refiled the disclosure to indicate he was an active investor.

In June, the SEC asked Musk in a letter whether he should have amended his public filing to reflect his intention to suspend or exit the deal.

The Information, a technology news site, reported in April that the FTC was investigating whether Musk failed to comply with an antitrust reporting requirement as he increased his stake in Twitter.

Twitter said in June that the takeover deal with Musk had allowed an antitrust waiting period for review by the FTC and the US Department of Justice. Read more

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Reporting by Tom Hals in Wilmington, Delaware, Sheila Dang in Dallas and Hyunjoo Jin in San Francisco; Editing by Chris Reese and Edwina Gibbs

Our standards: The Thomson Reuters Trust Principles.

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