The official profile of Elon Musk in the Twitter social network.
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The Securities and Exchange Commission has asked billionaire Elon Musk for more information about a tweet related to his $44 billion acquisition of Twitter, which he recently tried to reverse, a new regulatory filing showed Thursday.
The revelation sheds light on how Musk presented his commitment to the deal to the SEC, even as he searched Twitter for spam accounts on the platform. It also shows how the deal could put Musk back in the agency’s sights.
In a June 7 letter, Musk’s attorney and Skadden partner Mike Ringler responded to questions sent by the SEC’s Office of Mergers and Acquisitions a few days earlier.
The letter reiterated the clarification the SEC sought from Musk, including whether an earlier statement should be changed based on his tweet that the Twitter deal “cannot move forward” until the company provides more information about its spam accounts .
“The term ‘may not’ implies that Mr. Musk and his affiliates are exercising a legal right under the terms of the merger agreement to suspend completion of the acquisition of Twitter or otherwise do not intend to complete the acquisition,” the SEC wrote, according to the filing. “However, we note that the Schedule 13D has not been amended to reflect the apparent material change that has occurred in the facts previously reported in Item 4 of the Schedule 13D.”
At the time, Ringler responded that Musk did not believe his tweet “triggered any necessary amendment to his previously filed 13D schedule. Despite Mr. Musk’s desire to obtain information to assess potential spam and fake accounts, there is no significant change for Mr. Musk’s plans and proposals regarding the proposed transaction at this time.”
Musk has since tried to back out of the deal, claiming Twitter failed to hold up its end of the bargain by failing to disclose information it should have and making layoffs without Musk’s approval. But Twitter said it had honored the terms of the settlement and argued that Musk was simply trying to step aside now that market conditions have changed.
Twitter sued Musk in Delaware Chancery Court on Tuesday to force him to abide by the original agreement.
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