The SEC Sues Elon Musk Over Delayed Disclosure of Twitter Purchase
The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk in connection to his $44 billion acquisition of Twitter, now known as X, in October 2022.
The agency alleges that Musk saved $150 million by delaying the filing of a beneficial ownership report by 11 days, resulting in a 0.34% gain on stock tranches purchased before the disclosure was made on April 4, 2022.
After Musk filed the ownership report, Twitter’s shares surged by 27%, with Musk already owning 9% of the company’s shares at that time. The SEC claims that investors who sold Twitter stock during this period suffered economic harm due to artificially low prices.
The agency is seeking for Musk to disgorge any profits gained from the delayed filing and pay a civil fine. However, Musk’s attorney, Alex Spiro, has dismissed the allegations as a “sham,” stating that Musk did nothing wrong.
This lawsuit is the latest development in Musk’s ongoing conflict with the SEC. In 2018, Musk was sued by the agency for a misleading tweet about taking Tesla private, which resulted in a settlement where Musk paid a fine and stepped down as Tesla’s chairman.
Despite the SEC’s actions, Musk has maintained his innocence and continues to defend his actions. The future of the lawsuit remains uncertain, especially with key figures at the SEC set to depart from their positions.