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US Securities and Exchange Commission (SEC) has asked Elon Musk for more information on a tweet related to his $44 billion deal to take over Twitter Inc (NYSE: TWTR), which he terminated last week.
An SEC filing on Thursday showed Musk’s lawyer and a Skadden partner, Mike Ringler, in a letter to the market regulators dated June 7, responding to questions the SEC’s Office of Mergers and Acquisitions sent a few days earlier.
The letter clarified the explanation the SEC sought from Tesla Inc (NASDAQ: TSLA) CEO Musk, including whether an earlier filing should be amended based on the billionaire’s tweet that the Twitter deal “cannot move forward” until the company provides more information on its spam accounts.
“The term ‘cannot’ suggests 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.
“Yet, we note that the Schedule 13D has not been amended to reflect the apparent material change that has occurred to the facts previously reported under Item 4 of Schedule 13D.”
Ringler responded the billionaire didn’t believe his tweet “triggered any required amendment to his previously filed Schedule 13D. Despite Mr Musk’s desire to obtain information to evaluate the potential spam and fake accounts, there was no material change to Mr Musk’s plans and proposals regarding the proposed transaction at such time.”
Musk has since sought to terminate the deal, claiming Twitter did not uphold the contract by failing to disclose the information it should have and conducting layoffs without his approval.
However, the social media company has said it has complied with the terms of the agreement and has claimed Musk is simply trying to back out now as the market conditions have changed.
Twitter sued Musk in Delaware Chancery Court on Tuesday to seek to hold him to the original agreement.
Picture Credit: Cnet
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