SEC sues Elon Musk for delayed Twitter stake disclosure, alleges underpayment of $150 million

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that he failed to disclose his acquisition of Twitter shares within the required timeframe in early 2022.

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that he failed to disclose his acquisition of Twitter shares within the required timeframe in early 2022. This delay purportedly allowed Musk to purchase additional shares at lower prices, resulting in an underpayment of at least $150 million.

According to the SEC’s complaint, Musk began acquiring Twitter shares in early 2022, surpassing the 5% ownership threshold by March. Regulations mandate that investors disclose such stakes within ten days; however, Musk did not make the required disclosure until April 4, 2022, 11 days past the deadline. This postponement allegedly enabled him to continue buying shares at suppressed prices, as the market was unaware of his significant and growing stake in the company.

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The SEC’s lawsuit seeks to recover the alleged ill-gotten gains and impose civil penalties. Alex Spiro, Musk’s attorney, has dismissed the SEC’s action as unfounded, stating, “Elon Musk has done nothing wrong and everyone sees this for what it is—a sham.”

This legal action adds to Musk’s history of conflicts with the SEC. In 2018, he faced charges over a tweet claiming he had secured funding to take Tesla private, which led to a settlement requiring him to step down as Tesla’s chairman and pay a $20 million fine.

Musk completed his $44 billion acquisition of Twitter in October 2022, subsequently rebranding the platform as X. The SEC’s current lawsuit underscores the regulatory challenges Musk continues to encounter amid his expansive business ventures.