The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that the billionaire failed to disclose his early purchase of Twitter stock in a timely manner. The Securities Exchange Commission c that Musk’s delay in reporting his acquisition of more than 5 percent of Twitter’s shares allowed him to buy additional shares at artificially low prices, potentially saving himself at least $150 million.
Elon Musk, the CEO of Tesla and SpaceX, is no stranger to controversy. His acquisition of X, formerly Twitter, in October 2022 was uptight with legal battles and public scrutiny. Musk bought Twitter for 44 billion dollars. However, his initial purchase of Twitter shares began in early 2022, and by March of that year, he had acquired more than 5% of the company’s stock. According to SEC regulations, Musk was required to disclose this information within 10 days, but he failed to do so until April 4, 2022, 11 days after the deadline.
The lawsuit against Musk was filed in federal court in Washington, DC, on late Tuesday, January 14, on grounds of committing securities violations. More specifically, the suit argues that Musk’s failure to timely disclose his stock purchases means he committed securities fraud. Musk was still able to buy Twitter shares at lower prices by delaying the disclosure, ultimately building up a large stake in the company without notifying the market. The agency said this allowed Musk to underpay by at least $150 million for the shares he bought after the disclosure deadline.
This is not the first time Musk has found himself at odds with the SEC. The billionaire has a history of clashes with the regulatory body, including a high-profile settlement in 2018 over his tweets about taking Tesla private. Musk’s attorney, Alex Spiro, has dismissed the SEC’s latest lawsuit as a “sham” and part of a “multi-year campaign of harassment” against Musk. He said: Musk “has done nothing wrong and everyone sees this sham for what it is”.
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