SEC lawsuit claims Musk received more than $150 million for delaying disclosure of Twitter stake
After more than two years of investigation, the Securities and Exchange Commission sued Elon Musk for his delay in disclosing the Twitter stock he had accumulated before announcing his intention to acquire the company in 2022.
In court, the SEC says Musk filed documents with the SEC disclosing his purchase of Twitter shares 11 days after the SEC’s mandated deadline to do so. (Federal law, as the SEC notes in its statement, requires investors to publicly report when they acquire more than 5 percent of the company’s stock.) This delay, according to the regulator, allowed Musk to buy even more Twitter stock at the time where other investors were not aware of his involvement with the company.
From the case:
When Musk was required to publicly disclose his beneficial ownership but failed to do so, he spent more than $500 million buying additional shares of Twitter common stock. Because Musk failed to disclose his beneficial ownership in time, he was able to make these purchases to the unsuspecting public at artificially low prices, which had yet to reveal Musk’s undisclosed beneficial ownership of more than 5 percent of Twitter’s common stock and investments. purpose. In total, Musk paid Twitter investors a little more than $150 million for his purchases of Twitter common stock during this period. Investors who sold Twitter common stock during this time did so at artificially low prices and thus suffered significant economic losses.
The regulator has investigated Musk for many years, and has long been against the owner of X. At one point, the SEC accused Musk of trying to stall and use “gameplay” to delay its investigation into his investment in Twitter. Last month, Musk shared a copy of a letter addressed to SEC Chairman Gary Gensler in which Musk’s attorney, Alex Spiro, accused the regulator of “six years of abuse” targeting Musk. The letter revealed that Musk has rejected the SEC’s proposal related to its investigation of Twitter.
Musk also dealt with the emergence of some Twitter investors and related to the delayed disclosure. However, as The New York Times it is unclear whether the SEC’s latest action will be significant, as Gensler is expected to step down after the inauguration of President Donald Trump.
UX did not immediately respond to a request for comment. In a statement to The Times, Spiro called the SEC’s action a “one-stamp complaint,” calling it “an admission by the SEC that they can’t bring a real case.”
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