SEC Sues Elon Musk, Saying He Failed to Disclose Twitter Ownership in Time

The U.S. Securities and Exchange Commission has sued billionaire Elon Musk, claiming he failed to timely disclose his ownership of Twitter stock in early 2022, before purchasing the social networking site.

As a result, according to the SEC, Musk was able to underpay “at least $150 million” for the shares he purchased when he should have disclosed his ownership of more than 5% of Twitter’s stock. Musk purchased Twitter in October 2022 and later renamed it X.

Musk began accumulating shares in Twitter in early 2022, and by March of that year he owned more than 5%. At that point, the complaint says, the law required him to disclose his property, but he didn’t do so until April 4, 11 days after the report’s deadline.

Musk’s lawyer, Alex Spiro, said in a statement that the lawsuit “is an admission by the SEC that it cannot bring a real lawsuit” since Musk has “done nothing wrong.” He called the trial a “sham.”

“As the SEC withdraws and leaves office, the SEC’s years-long campaign of harassment against Mr. Musk culminated in the filing of a Section 13(d) complaint against Mr. Musk for a alleged administrative failure to file a single form – an offense that, even if proven, carries a nominal penalty,” Spiro added.

After Musk signed an agreement to acquire Twitter in April 2022, he tried withdraw of it, which led the company to sue him to force him to make the acquisition.

The SEC said that beginning in April 2022, it authorized an investigation into whether any securities laws were violated in connection with Musk’s purchases of Twitter stock and his statements and filings with the SEC related to the company.

Before filing suit, the SEC contacted court to try to force Musk to testify as part of an investigation into his takeover of Twitter.

The current chairman of the SEC, Gary Gensler, considers resigning from his post on January 20 and it is unclear whether the new administration will pursue the lawsuit.