Twitter says Elon Musk being investigated by US authorities

Social media company’s disclosure in court filing comes amid battle over $44bn takeover.

Twitter has said Elon Musk is under investigation by US authorities for “his conduct in connection with the acquisition” of the social media company, according to a court filing.

Twitter’s lawyers said that they had demanded copies of “substantive correspondence” between Musk and federal authorities over the alleged investigation “months ago”, but his team failed to produce them.

The documents at issue include a May 13 email to the Securities and Exchange Commission and a slide presentation to the Federal Trade Commission, according to a letter to judge Kathaleen McCormick of the Delaware Court of Chancery. The letter was sent last week but only filed in court on Thursday.

The company is attempting to resolve a legal battle with Musk and close a deal to sell itself to the Tesla chief executive. Musk first agreed to buy the social media platform in April for $44bn before attempting to pull out of the deal citing concerns over fake accounts, sparking a bitter legal dispute.

However, he revived his bid last week, prompting wrangling over the final shape of the sale. McCormick last week stayed the legal action until October 28 to give both sides the opportunity to come to a resolution.

In a text message, a lawyer for Musk, Alex Spiro, said Twitter’s letter was “misdirection”. Twitter declined to comment.

Before unveiling his initial bid for the company, Musk had accumulated a 9.2 per cent stake in Twitter in a series of share purchases that began as early as January. That was more than the 5 per cent threshold that triggers disclosure requirements.

Lawyers for Twitter previously claimed that Musk breached securities regulations by failing to make a timely disclosure of the transaction, which they said was due by March 24.

“Not until April 4 2022 did Musk finally disclose his holdings, which made him Twitter’s largest stockholder,” lawyers for the company wrote in their complaint against Musk.

In April, the SEC sent a letter to Musk asking him why he did not appear to have made the appropriate filing on time and why he had initially indicated that he was going to be a passive investor.

Twitter and Musk have repeatedly accused each other of not being forthcoming in providing internal communications relevant to the trial.

According to one person familiar with the situation, Twitter and Musk’s team are working on closing the deal ahead of the October 28 deadline. If the deal does not close, the judge has said she will set a trial date for November.