Elon Musk under investigation over deficient production of texts in $44bn Twitter deal

SpaceX and Tesla CEO Elon Musk is under federal investigation for his conduct in a $44 billion deal of Twitter acquisition, according to the social media platform’s court filing released on October 13. United States Delaware Law Firms, Potter Anderson & Corroon LLP, claimed in the filing that Musk now faces a federal inquiry linked to his conduct. The firms had appealed to SpaceX boss' attorneys to lay, transparently, the interactions the Tesla CEO held with the federal authorities about the sealed deal, but the latter failed to comply, as per the new filing.

Musk's lawyers had cited the ‘investigative privilege' for not making available the communication. Apparently, in September, Musk's attorneys explained that they had withheld the documents related to the communication with US Securities and Exchange Commission (SEC) and Federal Trade Commission (FTC) under the "privilege log," done back in May. "This game of ‘hide the ball’ must end…bear upon key issues in this litigation," the firms stated in the ruling. 

"Elon Musk is presently under investigation by federal authorities for his conduct in connection with the acquisition of Twitter," lawyers from Potter Anderson Corroon LLP said in the court filing. "Through counsel, he has exchanged substantive correspondence with those authorities concerning their investigations. Twitter wants those documents because they bear upon key issues in this litigation," they added. 

Trial set to begin on October 17

In the Delaware Court of Chancery's ruling, Judge Kathaleen McCormick reiterated that Tesla CEO will be able to proceed with the Twitter deal only under the original terms. The parties "have not filed a stipulation to stay this action, nor has any party moved for a stay,” Judge McCormick wrote. “I, therefore, continue to press on toward our trial set to begin on October 17, 2022," she noted, according to the Court of Chancery of the State of Delaware. Defendants have produced no Musk text messages between May 24 and May 30, nor between June 1 and June 7, the judge stressed. These periods were important to the parties’ dispute, and "I share Plaintiff’s concern that Musk produced no responsive text messages from these periods," said McCormick.

Twitter expressed concerns about the “allegedly deficient production of text messages and other instant messages to and from Elon Musk.” It seeks messages from January 1 to July 8 made with a laundry list of Silicon Valley elites by SpaceX founder. They accused Elon Musk of deliberately "deleting or withholding, or damaging messages" as well as seding communication over encrypted messaging apps— such as iMessage or Signal.

The signal is an encrypted messaging service that can be set to automatically delete messages after a certain period of time. Musk had publicly stated that he uses Signal, according to a Delaware court. One of the key players in Musk's inner circle, Jared Birchall testified that the Tesla boss “primarily” used Signal to communicate private or personal information to Musk, including “personal financial matters." Musk locked the deal worth $44 billion, agreed-upon price of $54.20 per share, to purchase Twitter, saying that the microblogging site has “tremendous potential.”