The SEC accuses Elon Musk of delaying the disclosure of his Twitter stake, gaining an unfair advantage and harming shareholders.
US Securities and Exchange Commission Sues Elon Musk Over Twitter Share Disclosures
US Securities and Exchange Commission Sues Elon Musk Over Twitter Share Disclosures
Lawsuit claims Musk manipulated share prices, costing Twitter investors $150 million
The U.S. Securities and Exchange Commission (SEC) has initiated legal action against Elon Musk, alleging that he neglected to report that he had acquired a significant stake in Twitter, subsequently enabling him to purchase shares at lower, “artificial” prices. The lawsuit claims that this oversight cost Twitter shareholders approximately $150 million. SEC regulations dictate that any investor whose holdings exceed 5% must promptly report this within a ten-day period; however, Musk reportedly made his disclosure 21 days after surpassing the threshold.
In response to the lawsuit, Musk criticized the SEC on social media as a “totally broken organization,” stating that their focus should be on more substantive crimes rather than targeting him. The SEC argues that Musk’s actions led to considerable financial harm for investors.
Musk's legal representation, led by attorney Alex Spiro, labeled the SEC's claims as “a sham” and part of a concerted effort to harass the billionaire. According to the SEC's records, Twitter’s stock price surged over 27% following Musk's announcement of his stake in April 2022.
Ultimately, Musk completed his acquisition of Twitter for $44 billion in October 2022, rebranding the platform as "X." The SEC's complaint was filed in a federal court located in Washington D.C. Furthermore, the SEC seeks to recover "unjust" profits from Musk and also impose a financial penalty.
Gary Gensler, the SEC's head, announced recently his intention to resign when Donald Trump resumes the presidency on January 20. Trump's administration had previously indicated plans to remove Gensler upon returning to office. It’s worth noting that under Gensler's leadership, the SEC has had several confrontations with Musk, who has been a supporter of Trump. Musk’s history with the SEC dates back to 2018 when he faced charges related to allegedly misleading investors about Tesla, resulting in a settlement that included restrictions on his social media activity.
In response to the lawsuit, Musk criticized the SEC on social media as a “totally broken organization,” stating that their focus should be on more substantive crimes rather than targeting him. The SEC argues that Musk’s actions led to considerable financial harm for investors.
Musk's legal representation, led by attorney Alex Spiro, labeled the SEC's claims as “a sham” and part of a concerted effort to harass the billionaire. According to the SEC's records, Twitter’s stock price surged over 27% following Musk's announcement of his stake in April 2022.
Ultimately, Musk completed his acquisition of Twitter for $44 billion in October 2022, rebranding the platform as "X." The SEC's complaint was filed in a federal court located in Washington D.C. Furthermore, the SEC seeks to recover "unjust" profits from Musk and also impose a financial penalty.
Gary Gensler, the SEC's head, announced recently his intention to resign when Donald Trump resumes the presidency on January 20. Trump's administration had previously indicated plans to remove Gensler upon returning to office. It’s worth noting that under Gensler's leadership, the SEC has had several confrontations with Musk, who has been a supporter of Trump. Musk’s history with the SEC dates back to 2018 when he faced charges related to allegedly misleading investors about Tesla, resulting in a settlement that included restrictions on his social media activity.
