Elon Musk is under federal investigation for $44bn deal, Twitter says

‘This game of “hide the ball” must end’, says Twitter in court filing

Arpan Rai
Friday 14 October 2022 10:01 BST
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Elon Musk offers to buy Twitter for second time

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Elon Musk is under investigation by US federal authorities who are probing his conduct in the $44bn takeover deal with Twitter, according to the social media company.

The exact focus of the investigation and the federal authorities conducting them is not immediately clear.

The court filing, released on Thursday, specified that the billionaire and Tesla chief is facing an investigation over the deal, which had been derailed in July this year, but is now back on track.

Twitter had sued Mr Musk in July after negotiating the sale of the social media website and forced him to close the deal.

Two months later, in September, Mr Musk’s attorneys shared a “privilege log” identifying documents to be withheld, Twitter said.

In this log, they referenced drafts of an email from 13 May to the US Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission (FTC).

“This game of ‘hide the ball’ must end,” Twitter said, according to the court filing.

The court filing, made on 6 October, asked Delaware judge Kathaleen McCormick to order the billionaire entrepreneur to share the documents.

On the same day, the judge halted the litigation between Twitter and the Tesla chief shortly after Mr Musk took a U-turn and said he would resume the deal to purchase Twitter.

The tech tycoon’s attorney Alex Spiro has called Twitter’s court filing a “misdirection” and asserted that it was “Twitter’s executives that are under federal investigation”.

Officials at Twitter have not responded to Mr Spiro’s statement and did not comment on its understanding of any probe into Mr Musk.

Earlier this month, the SpaceX chief executive broke his silence on the $44bn Twitter deal and shared his vision of the social media platform’s future under his ownership.

The billionaire said obtaining Twitter was the first step in creating a new “everything app”, similar to China’s WeChat.

“Buying Twitter is an accelerant to creating X, the everything app,” tweeted Mr Musk, hours after it emerged he had sent a letter to the Twitter board offering to go through with his purchase rather than fight in court later this month.

According to a report by a tech news site. The Information in April, the Federal Trade Commission was monitoring whether Mr Musk failed to comply with the antitrust reporting requirement relating to an investor’s intentions of being a passive or active shareholder.

Twitter had clarified in June that the takeover deal with Mr Musk had cleared an antitrust waiting period for review by the FTC and US Justice Department.

Mr Musk has been given time till 28 October by the court to seal the acquisition, failing which a trial date will be fixed for November.

In the last few months, Mr Musk had attempted to pull out of the deal, claiming that the platform’s leaders had not been honest with him about the number of bot and spam accounts.

In return, he was sued by Twitter and faced being deposed ahead of going before a judge in Delaware in several weeks. Experts had predicted that the world’s richest man would have had a difficult time winning his case based on the discovery that has been made public.

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