SEC lawsuit targets Elon Musk over alleged disclosure violation
The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of failing to disclose his significant stake in Twitter within the required timeframe. The regulator claims that this allowed Musk to purchase shares at artificially low prices, saving him $150 million in the process.
SEC regulations require investors to disclose holdings exceeding 5% within ten days. Musk reportedly surpassed this threshold and disclosed his stake 21 days later. The SEC argues that the delay caused substantial economic harm to other investors.
Following Musk’s disclosure on April 4, 2022, Twitter’s share price increased by more than 27%. Later that year, he completed the $44 billion acquisition of the platform and rebranded it as X.
The lawsuit, filed in a federal court in Washington, DC, seeks to recover unjust profits and impose penalties on Musk. It also highlights long-standing tensions between Musk and the SEC.
Under the leadership of Gary Gensler, the SEC has faced repeated clashes with Musk. Gensler announced plans to resign in January 2025, amid comments from then-president-elect Donald Trump about removing him upon taking office. Musk’s legal troubles with the SEC date back to 2018 when he was charged with misleading investors over claims of securing funding to take Tesla private. He later settled the charges, stepping down as Tesla’s chairman and agreeing to limitations on his social media activity regarding the company.
