Lawsuit Filed Against Elon Musk Over Twitter Stake Disclosure
The US markets watchdog SEC has filed a lawsuit against Elon Musk alleging that the tech-giant failed to disclose that he had amassed a stake in Twitter, allowing him to buy shares at “artificially low prices.” The Securities and Exchange Commission (SEC) lawsuit alleges that Musk saved $150m (£123m) in share purchases as a result.
SEC submitted the complaint to a federal court in Washington DC. The lawsuit asked the court order the Tesla owner to give up “unjust” profits and pay a fine.
According to SEC rules, investors whose holdings surpass 5% have 10 days to report that they have crossed that threshold. Musk did so 21 days after the purchase, said the lawsuit. In a social media post, Musk called the SEC a “totally broken organisation”.
He also accused the regulator of wasting its time when “there are so many actual crimes that go unpunished”. “Musk’s violation resulted in substantial economic harm to investors”, the SEC complaint said.
Also Read: Is Elon Musk Buying TikTok? What Do We Know
Musk’s lawyer, Alex Spiro, described the lawsuit as a “sham” and “a campaign of harassment” against his client. The remarks were made to an email made to BBC.
As per SEC, Twitter’s share price rose by more than 27% after Musk made his share purchase public on 4 April 2022. Musk ended up buying Twitter for $44bn in October 2022 and has since changed the platform’s name to X.
The head of the SEC, Gary Gensler, announced in November that he will resign from his role upon the return of Donald Trump to White House. The statement was made after the President-elect said he planned to sack Gensler on “day one” of his new administration.
Also Read: ‘Truly Evil, Very Bad, Mad’: Trump Supporter Slams Musk
This is not the first time SEC, and Gensler are clashing with Musk. In 2018, the regulator charged Musk with defrauding investors by claiming he had “funding secured” to take Tesla, the electric car company he leads, private. He later settled the charges, stepping down as chairman of the firm’s board and agreeing to accept what was dubbed a Twitter sitter – limits on what he could write on social media about the company, as reported by BBC.
