According to reports, Twitter submitted documents to the US Securities and Exchange Commission (SEC) today, showing that the SEC last month asked Tesla CEO Elon Musk Tweets of the Twitter deal explained, and Musk responded that there was no need for it. Due to doubts about the proportion of bot accounts on the Twitter platform, Musk tweeted on May 17 that unless Twitter can provide evidence that its fake user ratio is less than 5%, the acquisition will not proceed.
In a June 7 letter, Musk’s lawyers said SEC staff had challenged Musk’s tweet and demanded an explanation. Musk, on the other hand, believes that the tweet was enough for him to revise his previous SEC filing.
In the letter, Mike Ringler, an attorney with the law firm Skadden, Arps, Slate, Meagher & Flom, wrote: "Musk believes that the May 17, 2022 tweet about spam and tweets from fake accounts were not enough to get him to make any necessary revisions to the Schedule 13D file he had previously submitted.
"While Musk wanted information to assess potential spam and fake accounts, Musk's plans and proposals for the proposed transaction at the time did not materially change," Lingler said.
The letter from Musk's lawyers indicates that the SEC is challenging disclosures about Musk's $44 billion acquisition of Twitter. Last week, Musk said he would walk away from the deal, and Twitter filed a lawsuit.
In 2018, Musk reached a settlement with the SEC. In addition to fines and stepping down as Tesla chairman, under the settlement, Tesla also pledged to monitor Musk’s tweets and other communications about the company.
In March, Musk asked a judge to end the agreement, saying it was used by the SEC to trample on his First Amendment rights and restrict his speech in advance. But the request was rejected by the court, and Musk also appealed.
Analysts said today that the SEC is likely to launch an investigation into Musk’s acquisition of Twitter to assess whether Musk misled the market during the transaction.