In a filing in San Francisco federal court, the SEC says the sanctions motion will seek an order to show cause for why Musk should not be held in civil contempt for waiting until three hours before the scheduled September 10 testimony to advise he would not show up.
Musk, whose businesses include electric car maker Tesla and rocket company SpaceX and who is the world's richest person, went to Florida's Cape Canaveral that day to oversee the launch of SpaceX's Polaris Dawn mission.
But the SEC says that as SpaceX's chief technical officer, Musk "surely was already aware" of the planned launch because the company had discussed it two days earlier.
It said Musk's actions violated a May 31 court order compelling his testimony.
"Musk's excuse itself smacks of gamesmanship," SEC lawyer Robin Andrews wrote.
"The court must make clear that Musk's gamesmanship and delay tactics must cease."
Alex Spiro, a lawyer for Musk, called sanctions "drastic" and unnecessary, saying Musk's absence from the launch could have endangered astronauts' lives, and that his testimony has been rescheduled for October 3.
Musk's failure to testify on September 10 resulted from an "emergency" he did not cause, and "there is no reason to believe such an emergency will reoccur", Spiro wrote.
An SEC spokesperson declined to comment, though the regulator says in the court filing that nothing deters Musk from failing to show up on October 3.
The SEC is investigating whether Musk violated securities laws in early 2022 when he started accumulating Twitter stock.
Musk has been criticised, including by Twitter shareholders, for waiting at least 10 days too long to disclose he was buying Twitter shares.
Investors must disclose when they reach five per cent ownership of public companies. Musk eventually disclosed a 9.2 per cent Twitter stake, and soon thereafter offered to buy the whole company.
In July, Musk said he misunderstood SEC disclosure requirements, and that "all indications" suggested his delay was a "mistake".
The SEC sued last October after he missed a scheduled interview at its San Francisco office.
Musk has long feuded with the SEC, including after it sued him in 2018 over his Twitter posts about taking Tesla private.
Musk settled that lawsuit by paying a $US20 million fine, agreeing to have Tesla lawyers review some posts in advance, and giving up his role as Tesla's chairman.
