SEC sues Elon Musk over late disclosure of Twitter stake
STORY: Elon Musk was sued on Tuesday by the U.S. Securities and Exchange Commission.
The SEC accused the world’s richest person of waiting too long to disclose in 2022 he had amassed a large stake in Twitter,
the social media company he later bought and renamed X.
An SEC rule requires investors to disclose within 10 days when they cross a threshold of owning 5% or more of a company.
The agency said that at the expense of unsuspecting investors.
Musk instead waited 21 days to disclose his initial purchase of 5% of Twitter’s common shares at artificially low prices.
The SEC said Twitter’s share price then rose more than 27% once Musk disclosed his stake.
Tuesday’s lawsuit seeks to force Musk to pay a civil fine and give up, ‘unjust’ profits.
Alex Spiro, a lawyer for Musk, called the suit the culmination of the regulator’s ‘multi-year campaign of harassment’ against his client.
He added the lawsuit addresses a mere ‘alleged administrative failure to file a single form – an offense that, even if proven, carries a nominal penalty.’
The filing against Musk comes six days before Trump’s January 20 inauguration, when SEC Chair Gary Gensler will step down.
Trump’s nomination to succeed him, Paul Atkins, is expected to review many of Gensler’s rules and enforcement actions.
