An IMGW News Report
US securities regulators have filed a lawsuit against Elon Musk, alleging he failed to disclose his Twitter share purchases in a timely manner, enabling him to secure a $150 million discount on subsequent acquisitions. The Securities and Exchange Commission (SEC) claims Musk violated US securities law by not disclosing ownership of more than 5% of Twitter shares within the required timeframe.
The civil suit, filed in Washington federal court, alleges that Musk acquired over 5% of Twitter shares by 14 March 2022 but delayed public disclosure until 4 April — 11 days after the deadline. On the day his stake became public, Twitter’s share price surged by 27%. The SEC contends that this delay allowed Musk to continue buying shares at artificially low prices, resulting in significant underpayment for his subsequent acquisitions.
The alleged violation occurred during Musk’s preparations to acquire Twitter, a deal completed in October 2022 for $44 billion. Following the purchase, Musk rebranded the platform as X. This lawsuit represents another clash between the SEC and Musk, who previously settled a 2018 securities fraud case over Tesla-related social media posts.
The complaint is among the final actions led by SEC Chair Gary Gensler before his departure on 20 January, coinciding with Donald Trump’s presidential inauguration. Musk, a close ally of Trump, has been a frequent critic of the SEC.
Alex Spiro, Musk’s attorney, dismissed the lawsuit as a minor and unfounded claim, accusing the SEC of conducting a years-long campaign of harassment. Spiro argued that the case lacks substance, asserting Musk has committed no wrongdoing.
The SEC’s investigation into Musk’s share purchases began in April 2022, with regulators questioning his late disclosure and his initial representation as a passive investor.
