Elon Musk faced SEC questions over his timing in disclosing Twitter stake

“I think it could be laziness or the belief that rules don’t apply,” Taylor told CNN Business earlier this month . “But if you look at when the SEC enforces late filing, it’s relatively rare. From a cost-benefit basis, it makes sense not to file. Even if the cost for reporting late is a $100,000 fine or a multi-million-dollar fine, why wouldn’t he [delay filing]?”

The SEC also asked why Musk initially filed a disclosure meant for passive investors that do not plan to exercise their influence to make change at a company. Musk had previously made several comments on Twitter suggesting he felt changes needed to be made to the platform.

“Your response should address, among other things, your recent public statements on the Twitter platform regarding Twitter … including statements questioning whether Twitter (the issuer) rigorously adheres to’ ‘free speech principles,'” the SEC said in its letter.

Musk and the SEC did not immediately respond to requests for comment. Twitter declined to comment.

The letter adds another complicating factor to an already fraught deal . Musk in recent weeks has thrown the acquisition into question by saying it is “on hold” pending details on the number of spam accounts on the platform, despite waiving due diligence for the transaction. Twitter has said it remains “committed to completing the transaction on the agreed price and terms.”

The Tesla ( TSLA ) CEO has had a rocky history with the SEC. In 2018, Musk tweeted that he was “considering taking Tesla private at $420” and that he had “funding secured,” sparking a frenzy and sending shares in the automaker up to $371 from $342. The SEC later said the funding had, in fact, not been secured and sued Musk for misleading investors. Musk eventually settled with the SEC for $20 million and gave up his position as chairman of Tesla.

Musk tried to fight a provision of that settlement that requires him to have certain tweets about Tesla reviewed by lawyers before posting them — and has made a number of disparaging comments about the agency. But a judge last month refused to strike down the settlement, saying in his ruling that none of Musk’s “arguments hold water.”