**The lawsuit highlights regulatory concerns while Musk criticizes the SEC as flawed.**
**SEC Files Lawsuit Against Musk Over Twitter Ownership Disclosure**
**SEC Files Lawsuit Against Musk Over Twitter Ownership Disclosure**
**Elon Musk is accused of failing to disclose his Twitter stake, leading to significant financial gain.**
The U.S. Securities and Exchange Commission (SEC) has initiated a legal suit against Elon Musk, alleging that he neglected to inform the public about his increasing stake in Twitter, now known as X, thereby enabling him to acquire shares at "artificially low prices." According to the SEC’s complaint, Musk's delay in reporting his share purchase allowed him to save approximately $150 million, negatively impacting Twitter shareholders.
Regulatory guidance demands that any investor who surpasses a 5% ownership threshold must file a report within 10 days. However, Musk reportedly waited 21 days before disclosing his purchase, a breach the SEC is firmly addressing in the newly submitted court case in Washington D.C.
In response to the suit, Musk criticized the SEC on social media, labeling it a "totally broken organization" that misappropriates resources while letting genuine crimes go unpunished. His legal representation, Alex Spiro, denounces the lawsuit as a "sham" reflective of a "campaign of harassment" against the prominent entrepreneur.
The SEC’s complaint emphasizes the substantial financial detriments Musk’s actions inflicted on investors, particularly pointing out the 27% increase in Twitter's share price following Musk's public purchase announcement on April 4, 2022.
Musk later acquired Twitter for $44 billion in October 2022, subsequently rebranding the platform as X. The SEC is seeking actions from the court to require Musk to forfeit any "unjust" profits and to impose a penalty.
SEC Chair Gary Gensler, who has had an ongoing conflict with Musk and is expected to resign with Donald Trump's potential return to the presidency in January, noted that this lawsuit is part of the SEC's continued commitment to maintaining fair market practices. Musk has had previous confrontations with the SEC, dating back to a 2018 incident where he was charged with misleading investors concerning Tesla's status as a private company.
