The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing the billionaire of misleading shareholders during his acquisition of Twitter stock in 2022.
According to the SEC, Musk failed to disclose his ownership of more than 5% of Twitter’s shares within the required timeframe, allowing him to purchase additional shares at artificially low prices.
The Deceptive Scheme
The SEC’s complaint alleges that Musk began acquiring Twitter shares in early 2022 and had surpassed the 5% ownership threshold by March of that year.
However, he did not disclose his ownership until April 4, 11 days after the report was due. This delay enabled Musk to continue buying shares at prices that did not reflect his considerable stake in the company, resulting in an estimated underpayment of $150 million.
BREAKING: Biden's SEC suing Elon Musk over Twitter acquisition just days before Gensler, Biden leave their positions.
Biden predicted this 2 years ago: pic.twitter.com/4tTM3YiAiw
— End Wokeness (@EndWokeness) January 14, 2025
Legal and Financial Implications
The SEC’s lawsuit, filed in federal court in Washington D.C., claims that Musk’s actions violated federal securities laws.
The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties. Musk’s attorney, Alex Spiro, has dismissed the allegations, describing the lawsuit as part of a “multi-year campaign of harassment” by the SEC.
The Securities and Exchange Commission sued Elon Musk in federal court on Tuesday for allegedly misleading shareholders when he bought hundreds of millions of dollars worth of Twitter stock in 2022, before acquiring the company.
Read more: https://t.co/WWjurhMOJ4 pic.twitter.com/BEpct8nsyh
— ABC News (@ABC) January 15, 2025
Musk’s Response and Ongoing Legal Battles
Musk’s legal team argues that the SEC’s case is based on an administrative oversight and lacks substantial merit. Spiro contends that the issue revolves around the failure to file a single form on time and that Musk has done nothing wrong.
This lawsuit adds to Musk’s ongoing legal challenges, including previous SEC investigations and fines related to his “funding secured” tweet in 2018.
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