The SEC has filed a lawsuit against Elon Musk, accusing him of failing to disclose his Twitter stock ownership in time before acquiring the social media platform in 2022 and later renaming it X.
The delay in disclosing details of the Twitter stock Musk held allegedly allowed him to buy shares at a lower rate, saving at least $150 million.
SEC Sues Elon Musk Over Delayed Twitter Stock Disclosure
The Securities and Exchange Commission (SEC) filed the suit late Tuesday in Washington’s US District Court. The suit alleges that Musk began collecting Twitter shares in 2022, and by March, he owned more than 5% of its shares, which, by law, required him to disclose his ownership. However, Musk did so only on April 4, 11 days later than the legal deadline.
Elon Musk’s attorney, Alex Spiro, described the SEC’s action as an admission of its weak position. He also defended his client, stating that Musk has not violated any laws and called the SEC’s actions a sham.
Musk acquired Twitter in April 2022 and renamed it X the following year. After signing a deal to acquire the platform, Musk expressed doubts about the agreement, leading the company to file a lawsuit to enforce the acquisition.
The SEC authorized an investigation into potential securities law violations in Musk’s Twitter stock purchases and related filings. Before filing the lawsuit, the SEC approached the court to compel Musk to testify as part of its investigations.
The current SEC Chairman, Gary Gensler, is set to end his term on January 20, after which a new chairman will be appointed by the incumbent US President Donald Trump.
It remains unclear if the forthcoming US administration will pursue the lawsuit. Gary Gensler’s term has been controversial, with frequent clashes with the cryptocurrency industry.
