- SEC accuses Musk of failing to disclose Twitter stake and saving over $150 million in the process.
- Musk faces legal action for violating securities laws during his Twitter acquisition in 2022.
- SEC lawsuit claims Musk bought Twitter shares at lower prices due to delayed disclosure.
The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk. The lawsuit accuses him of securities fraud in connection with his 2022 acquisition of Twitter. The SEC alleges that Musk failed to declare his shareholding in the firm within the necessary time frame. The complaint was filed in federal court in Washington, DC.
Alleged Delay in Disclosing Stake
Musk started buying Twitter stock in March 2022. According to federal requirements, if a stakeholder exceeds 5% ownership, they must report it within ten days. The SEC claims Musk did not meet this criteria.
The government believes Musk waited 11 days to reveal his purchase of more than 5% of Twitter stock. During this time, he continued to purchase shares at lower prices. This allowed him to buy stock from unsuspecting investors, saving him more than $150 million.
Musk publicly announced on April 4, 2022 that he owned more than 9% of Twitter. The stock price of Twitter increased by more than 27% as a result of this disclosure. The SEC claims Musk’s delayed disclosure influenced the stock market and allowed him to underpay for shares. The commission alleges that Musk violated securities laws by failing to report his holdings on time.
Musk’s Legal Troubles Continue
The SEC is seeking a jury trial in this case. It wants Musk to pay civil penalties and return the profits he earned from the delayed disclosure. The lawsuit is just one of many legal issues Musk has encountered. He has had previous run-ins with the SEC, including a Tesla lawsuit in 2018. In the matter, Musk was accused of making false statements about taking Tesla private. Musk and Tesla settled, but the SEC continued to investigate him.
In addition to the SEC lawsuit, Musk is facing a separate case from the Oklahoma Firefighters Pension and Retirement System. This case also alleges that Musk misled investors by delaying his Twitter acquisition disclosure.
Musk’s relationship with the SEC has been strained for several years. He has accused the agency of unfairly targeting him. This new lawsuit is the latest in a long line of legal battles for the billionaire.
