Twitter Inc (NYSE:TWTR) revealed that billionaire bidder Elon Musk is being investigated by federal authorities over his conduct in his $44 billion takeover deal with the social media company in a court filing released on Thursday. Reuters reported.
While the filing said he was under investigation, it did not say what the exact focus of the probes was and which federal authorities are conducting them, the newswire added.
Twitter, which sued Musk in July to force him to close the takeover deal, said attorneys for the Tesla Inc (NASDAQ:TSLA) CEO had claimed "investigative privilege" when refusing to hand over documents it had sought.
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Reuters reported that in late September, Musk's attorneys had provided a "privilege log" identifying documents to be withheld, Twitter said. The log referenced drafts of a May 13 email to the US Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission (FTC).
The court filing, which asked Delaware judge Kathaleen McCormick (NYSE:MKC) to order Musk's attorneys to provide the documents, was made on October 6, 2022, the same day that McCormick paused litigation between the two sides after Musk reversed course and said he would proceed with the deal.
The SEC has questioned Musk's comments about the Twitter acquisition, including whether a 9% stake he had built up before announcing his bid had been disclosed late and why it indicated that he intended to be a passive shareholder. Musk later refiled the disclosure to indicate he was an active investor.
In June, the SEC asked Musk in a letter whether he should have amended his public filing to reflect his intention to suspend or abandon the deal.
Twitter said in June, however, that the takeover deal with Musk had cleared an antitrust waiting period for review by the FTC and US Justice Department.
Judge McCormick has given Musk until October 28 to close the acquisition. If the deal does not get done by then, a trial date will be set for November.