US SEC sues Elon Musk over delayed disclosure of Twitter stake acquisition in 2022 before buying platform
The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of delaying the disclosure of his 5 percent stake acquisition in Twitter by 11 days in 2022.
FollowThe US Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk on Tuesday (Jan 14), accusing the billionaire of failing to promptly disclose his significant acquisition of Twitter stock in 2022, a company he eventually purchased. The SEC's complaint, lodged in a federal court in Washington, DC, claims that Musk breached federal securities regulations by delaying his public disclosure of buying a 5 percent stake in Twitter by 11 days.
According to SEC regulations, investors must report their ownership when it surpasses 5 percent within 10 calendar days. In Musk's case, this disclosure was due by March 24, 2022.
The SEC claimed that Musk took advantage of unaware investors by purchasing over USD 500 million worth of Twitter shares at artificially reduced prices, only disclosing his acquisitions on April 4, 2022, by which point his stake had reached 9.2 percent.
The SEC noted that Twitter's share price surged by over 27 percent after Musk's disclosure. The lawsuit filed on Tuesday aims to compel Musk to pay a civil fine and return any unjustly gained profits.
Musk went on to acquire Twitter for USD 44 billion in October 2022, later rebranding it as X.
Musk's lawyer, Alex Spiro, described the SEC's lawsuit in an email as the result of the regulator's "multi-year campaign of harassment" against Musk.
"Today's action is an admission by the SEC that they cannot bring an actual case," he said. "Mr Musk has done nothing wrong and everyone sees this sham for what it is."
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