The company said in an October 6 court filing that Musk is being investigated over "conduct" related to his pending acquisition of the company. The Delaware Court of Chancery was told that Elon Musk is under investigation by federal authorities.
The filing describes the attempts to get documents related to the investigations. The final communications themselves were not produced nor logs produced by Musk's law firm.
He has exchanged correspondence with the authorities. The documents bear upon important issues in the litigation. There was a request for the production of those documents. The trial is just 11 days away.
The trial was delayed to give Musk and Twitter three weeks to complete the merger. The court was asked for an order compelling the production of Defendants' lawyers' communications with the government.
Since July 22, it has been looking for the documents, and Musk has tried to avoid producing them.
Defendants initially resisted production by reserving the right to withhold communications based on something they called "investigative privilege." After the Court cast doubt on that species of "privilege," Defendants have adopted a new approach. Instead of logging the communications as privileged, they simply deemed them outside the scope of discovery, on the theory that the search protocol Twitter negotiated with Defendants' counsel somehow missed the mark.
The obvious explanation for Defendants' stonewalling is that they don't want to undermine Defendants' position in this litigation by obtaining documents that will be used against them. That isn't an excuse. They should be forced to collect and produce the requested communications immediately.
AdvertisementThe SEC questioned Musk over his May 17 statement that the deal couldn't move forward until he explained the company's estimates of fake accounts. The SEC told Musk that it was possible that he and his affiliates were exercising a legal right under the merger agreement to suspend the acquisition.
The SEC was looking into Musk's disclosure of his 9.2 percent stake in the company before he tried to buy it. According to reports, the FTC opened an inquiry into whether Musk failed to comply with antitrust reporting requirements. Musk initially stated in his initial filing that he intended to be a passive shareholder, but later changed his mind and stated that he was an active investor.
The lawyer for Musk claimed that the filing was a misrepresentation. According to Alex Spiro, an attorney for Musk, the court filing was a misdirection and that it was the executives that were under federal investigation.
The defendants did not deny that their counsel exchanged responsive, non-privileged communications with governmental authorities regarding Musk's acquisition of Twitter. They argue that the request for production comes too late and that their counsel agreed only to produce documents identified through the application of agreed upon search terms. The two arguments have no merit.
The company said that defendants have resisted and delayed production for months after they were asked to provide the documents in July. They can't cite their own obstruction as a reason for denying the documents that they requested from the beginning. Search terms don't give an excuse for avoiding the production of relevant responsive documents that are known to counsel, such as the government communications at issue on this Motion, according toTwitter.
If the acquisition is completed, the court case will be over. The trial was delayed due to Musk trying to get out of the deal. There is a problem with Musk's financing and he won't commit to a closing date.
Musk was criticized by a judge for withholding text messages due to "glaring deficiencies" in his document production. Musk may have been reprimanded for failing to produce Signal messages, which were deleted using the automatic deletion feature.
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