The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing the billionaire of failing to disclose his ownership of Twitter stock in a timely manner. The regulator alleges this delay allowed Musk to acquire additional shares at “artificially low prices,” thereby disadvantaging other shareholders.
Alleged Securities Violations
The SEC lodged the complaint on Tuesday in a Washington, D.C. federal court, citing securities violations. According to the suit, Musk did not disclose his acquisition of a 5% stake in Twitter—now rebranded as X—within the required timeframe. This omission allegedly enabled Musk to underpay by at least $150 million for shares purchased after the disclosure deadline.
The filing states that Musk disclosed his ownership 11 days after the mandated deadline. During this delay, he reportedly spent over $500 million acquiring additional shares. The SEC claims these purchases occurred at prices that did not reflect the true market value, affecting “unsuspecting” shareholders.
The lawsuit further details the stock market reaction after Musk’s eventual disclosure. On the day his ownership stake was made public, Twitter’s stock price surged by over 27%, the SEC noted.
Elon Musk Responds
Alex Spiro, Musk’s attorney, dismissed the lawsuit in a statement, characterizing the SEC’s claims as baseless. “The SEC’s case amounts to an admission that they have no case,” Spiro asserted. He added, “Mr. Musk has done nothing wrong, and everyone sees this sham for what it is.”
Spiro also described the issue as an administrative oversight, stating the complaint stemmed from a failure to “file a single form.” He accused the SEC of pursuing a “multi-year campaign of harassment” against Musk.
Elon Musk: History with the SEC
This is not the first time the SEC has scrutinized Musk’s financial dealings. In 2021, the agency investigated both Elon Musk and his brother, Kimbal Musk, for alleged securities fraud and insider trading. The inquiry followed their sale of significant Tesla shares.
Elon Musk, who serves as CEO of Tesla, has frequently clashed with the SEC over his financial disclosures and social media posts.
Political Connections Raise Questions
The lawsuit also highlights Musk’s growing political ties, particularly with former President Donald Trump. Over recent months, Musk has reportedly donated millions to Trump’s reelection efforts and appeared at campaign events. Trump has even proposed appointing Musk to head a proposed advisory group, the “Department of Government Efficiency,” which would oversee regulations and government spending.
The SEC emphasized the broader implications of Musk’s delayed disclosure, alleging it undermined the integrity of financial markets. “Musk’s failure to disclose his ownership stake deprived investors of critical information needed to make informed decisions,” the agency stated.
Also Read: ‘Starlink And Cybertrucks’: How Elon Musk Is Helping Wildfire Victims
