Michelle ThompsonThe US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of failing to disclose his acquisition of a significant stake in Twitter within the required timeframe. This alleged delay allowed him to purchase shares at “artificially low prices,” reportedly saving $150 million (£123 million).
SEC regulations mandate investors to report holdings exceeding 5% within 10 days; however, Musk reportedly delayed his disclosure by 21 days. The SEC’s complaint states that his actions caused “substantial economic harm to investors.”
In response, Musk criticized the SEC in a social media post, describing it as a “totally broken organization” and accusing it of ignoring more serious offenses. Musk’s attorney, Alex Spiro, called the lawsuit a “sham” and part of a “campaign of harassment.”
According to the SEC, Twitter’s stock price surged over 27% after Musk revealed his stake on April 4, 2022. Musk eventually acquired Twitter in October 2022 for $44 billion and rebranded the platform as “X.”
The lawsuit, filed in a Washington DC federal court, seeks to have Musk surrender “unjust” profits and pay a penalty.
The SEC’s head, Gary Gensler, announced plans to step down on January 20, aligning with President-elect Donald Trump’s return to office, as Trump has vowed to dismiss him on his first day.
Musk’s disputes with the SEC predate Gensler’s tenure. In 2018, Musk faced SEC charges for allegedly misleading investors about plans to take Tesla private, resulting in a settlement that included his resignation as Tesla’s chairman and restrictions on his social media communications regarding the company.
