Elon Musk ‘Presently’ Under Federal Investigation Over Twitter Deal, Company Alleges

Topline

Lawyers representing Twitter claimed in a legal filing that Elon Musk is “presently under investigation by federal authorities for his conduct in connection with the acquisition of Twitter,” and pushed Musk to hand over his communications with federal officials, marking the latest twist in a legal whirlwind involving the world’s richest man and his embattled $44 billion deal to buy the social media platform.

In this photo illustration, the image of Elon Musk is displayed on a computer screen and the logo of … [+] Twitter on a mobile phone in Ankara, Turkey on October 6, 2022. (Muhammed Selim Korkutata / Anadolu Agency)

Anadolu Agency

Key Facts

Attorneys with the firm Potter Anderson Corroon LLP made the claim in an October 6 Delaware court filing unsealed Thursday.

The attorneys also accused Musk of failing to turn over documents concerning the federal investigation ahead of a trial between Musk and Twitter over the billionaire’s attempts to pull out of his acquisition deal.

The filing does not specify which arm of the federal government is conducting the investigation, what the probe is focused on or whether it’s a civil or a criminal probe, but the Securities and Exchange Commission acknowledged in May that it was investigating whether he properly disclosed a 9% stake he bought in the company, which became public in early April.

Musk did not immediately respond to a request for comment from Forbes.

Crucial Quote

“This game of ‘hide the ball’ must end,” Twitter’s lawyers said in the Delaware Court of Chancery filing. “Twitter therefore seeks the Court’s assistance in obtaining the production of Defendants’ lawyers’ communications with the government concerning Twitter and the Twitter transaction.”

Key Background

Musk said in July he was “terminating” the surprise deal to buy Twitter over concerns about the number of fake and spam accounts that populate the social network, but the company rejected his claims and quickly responded with a lawsuit against the billionaire, in an attempt to force the deal to go through. A trial was set to start next Monday, but Musk unexpectedly reversed course last week, with a filing stating the deal was back on at the original $44 billion price. A judge set a new deadline of October 28 for Musk to close the deal or a trial will move forward.

Tangent

A Twitter investor filed a lawsuit against Musk on Monday, claiming his fickle approach to the deal and numerous public statements disparaging Twitter were attempts to lower the $44 billion price tag.

Forbes Valuation

We estimate Musk to be worth $219 billion, making him the richest person in the world.