A federal judge on Friday rejected the U.S. Securities and Exchange Commission’s request to sanction Elon Musk after he failed to appear for court-ordered testimony for the regulator’s probe into his $44 billion takeover of Twitter.
TakeAway Points:
- A federal judge denied the U.S. Securities and Exchange Commission’s attempt to punish Elon Musk for his failure to show up for court-mandated testimony related to the agency’s investigation into his $44 billion acquisition of Twitter.
- The SEC had sought a declaration that Musk violated a May 31 court order to provide testimony.
- The U.S. Chamber of Commerce informed members that the Biden administration will be announcing additional export restrictions on China as early as next week.
US judge rejects SEC bid to sanction Elon Musk
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 on Oct. 3 and agreed to pay the SEC’s $2,923 of travel costs.
“Because the present circumstances forestall any occasion for meaningful relief that the court could grant, the SEC’s request is moot,” Corley wrote.
The SEC had sought a declaration that Musk violated a May 31 court order to provide testimony.
It said having only to repay travel costs would not deter many other people from ignoring court orders, “much less someone of Musk’s extraordinary means.”
Musk said he complied with the order by testifying on Oct. 3. He is worth $321.7 billion, according to Forbes magazine.
Musk, whose businesses include electric car maker Tesla and rocket company SpaceX and who is the world’s richest person, went to Florida’s Cape Canaveral on Sept. 10 to oversee the launch of SpaceX’s Polaris Dawn mission.
Musk under SEC’s probe
The SEC is investigating whether Musk violated securities laws in early 2022 by waiting at least 10 days too long to disclose he had begun accumulating Twitter stock.
Critics and some investors have said this let him buy shares cheaply before he eventually disclosed a 9.2% Twitter stake and shortly thereafter offered to buy the whole company.
In July, Musk said he misunderstood SEC disclosure rules and that “all indications” suggested he made a “mistake.”
The SEC also sued Musk in 2018 over his Twitter posts about taking Tesla private. He settled that lawsuit by paying a $20 million fine, agreeing to let Tesla lawyers review some posts in advance and stepping down as Tesla’s chairman.
The case is SEC v. Musk, U.S. District Court, Northern District of California, No. 23-mc-80253.
Chamber of Commerce sees new US export crackdown on China
The Biden administration is set to unveil new export restrictions on China as soon as next week, the U.S. Chamber of Commerce told members in a Thursday email.
The new regulations could add up to 200 Chinese chip companies to a trade restriction list that bars most U.S. suppliers from shipping goods to the targeted firms, the email from the powerful Washington-based lobbying group said, according to an excerpt seen by Reuters on Friday.
The Commerce Department, which oversees U.S. export policy, plans to publish the new regulations “prior to the Thanksgiving break,” next Thursday, according to the email.
The update, if accurate, shows the Biden administration is plowing ahead with plans to further crack down on China’s access to semiconductors even as the start of Republican President-elect Donald Trump’s second term in January approaches.
Another set of rules curbing shipments of high-bandwidth memory chips to China is expected to be unveiled next month as part of a broader artificial intelligence package, the email continues.
Biden has slapped a raft of export controls on China aimed at halting its technological advances amid fears the technology could be used to bolster China’s military.
Sources briefed on the matter said the first round of regulations are likely to include restrictions on chipmaking tool shipments to China.
It was reported in July that the U.S. planned to unveil a new package of export controls on China, including adding about 120 Chinese entities to its restricted trade list.
