Elon Musk’s company, X Corp., is issuing a subpoena against Democratic senator Elizabeth Warren of Massachusetts. Musk is subpoenaing Warren in response to Warren’s recent call for the Securities and Exchange Commission (SEC) to investigate Musk’s simultaneous leadership roles at Tesla and Twitter.
The subpoena demands documents and communications related to Warren’s letter to the SEC, as well as any exchanges she had with the SEC and Federal Trade Commission (FTC). Musk is specifically seeking documents dating back to October 27, 2022, which coincides with the completion of his $44 billion acquisition of Twitter.
In her July 17 letter to the SEC, Warren urged an investigation into Tesla’s Board of Directors’ actions concerning the potential conflicts arising from Elon Musk’s dual positions. She raised concerns about conflicts of interest, misappropriation of corporate assets, and negative impacts on Tesla shareholders.
Despite investor demands to address these issues, Warren argued that the board had failed in its duty to ensure Musk acted in the best interests of Tesla. Even with Twitter appointing a new CEO, Linda Yaccarino, Warren believes Musk may still retain significant control over Twitter’s core functions.
X Corp., which is now the successor company of Twitter, informed the Northern District of California federal court about its intention to subpoena Senator Warren on July 20. The subpoena is part of a case in which Musk seeks to terminate a privacy settlement agreed upon by Twitter and the FTC before he acquired the company. Additionally, Musk aims to avoid an FTC deposition and wants the court to restrict the FTC’s ongoing investigation into Twitter’s privacy and data practices.
If the SEC acts on Warren’s request for an investigation, it could pose new challenges for Musk.
In her letter, Warren expressed concerns about Tesla’s board composition and the potential violation of the rule requiring a majority of independent directors. She pointed out close relationships between certain board members and Musk, which may explain the board’s reluctance to address his actions. Warren also raised questions about Musk potentially misappropriating Tesla resources for his Twitter venture by involving trusted Tesla employees.
