The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against tech billionaire Elon Musk, accusing him of failing to disclose his ownership of more than 5% of Twitter shares within the legally required timeframe during his 2022 acquisition of the company.
According to the SEC, Musk began purchasing Twitter shares in early 2022, surpassing the 5% threshold on March 14, 2022. Federal law mandates disclosure within 10 calendar days, but Musk only revealed his 9% stake on April 4, 11 days late. This announcement caused Twitter’s share price to surge by 27%.
The SEC claims Musk’s delay in disclosure allowed him to “underpay by at least $150 million” for Twitter shares, resulting in financial losses for shareholders who sold their stock during the period. The agency is seeking repayment of the alleged shortfall along with additional penalties.
Musk’s attorney, Alex Spiro, dismissed the allegations, describing the lawsuit as part of a “multi-year campaign of harassment” by the SEC. Spiro maintained that Musk had “done nothing wrong.”
The case comes as Musk remains a close ally of Donald Trump, who is set to be inaugurated as U.S. president on January 20. The transition of power will bring changes to the SEC’s leadership, as current chairman Gary Gensler has announced his resignation.
Musk acquired Twitter, now rebranded as X, in October 2022 for $44 billion. The outcome of the lawsuit could have significant implications for Musk’s business dealings and his relationship with regulatory authorities.
