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Elon Musk Under Federal Investigation Over Twitter Deal

Elon Musk is being investigated by federal authorities related to his $44 billion Twitter acquisition, with details emerging about the deal's termination and ongoing legal disputes.
Published on 2022-10-14

Elon Musk Under Federal Investigation Over Twitter Deal

Federal authorities have launched an investigation into Elon Musk's conduct during his $44 billion takeover of Twitter. While the exact nature of the investigation remains unclear, it stems from Musk's actions surrounding the acquisition.

Background of the Deal Termination

In July, Musk abruptly terminated the deal, alleging that Twitter misrepresented the number of spam and fake bot accounts on its platform. This decision led to a significant decline in Twitter's stock price, prompting the company to accuse Musk of using bots as a pretext to exit the deal.

Legal Filings and Disputes

A recent court filing requested that Delaware Judge Kathaleen McCormick order Musk and his legal team to produce documents related to the deal's closure. Twitter's board also accused Musk of failing to submit draft communications with the Securities and Exchange Commission (SEC).

Musk's attorneys have claimed "investigative privilege" in refusing to submit the requested documents. Musk's lawyer, Alex Spiro, dismissed the filing as a "misdirection" and asserted that it is Twitter's executives who are under federal investigation.

SEC Scrutiny and Investor Implications

The SEC has separately questioned Musk's handling of the acquisition, particularly his late disclosure of a 9% stake in Twitter before terminating the deal. These developments have raised concerns among investors about the transparency and legality of Musk's actions.

The ongoing legal battles and investigations highlight the complexities and risks surrounding high-stakes corporate acquisitions, particularly when involving prominent figures like Elon Musk. Investors and stakeholders will closely monitor the outcomes of these proceedings.

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