The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of failing to disclose his acquisition of a significant stake in Twitter, which allegedly allowed him to buy shares at “artificially low prices.”
The SEC claims that Musk saved $150 million in share purchases due to the delay in his disclosure. Under SEC rules, investors must report holdings exceeding 5% within 10 days, but Musk took 21 days to announce his purchase.
Musk has responded on social media, calling the SEC a “totally broken organisation” and accusing it of wasting resources on his case when other crimes go unpunished.
The lawsuit seeks to have Musk relinquish any “unjust” profits and pay a fine. Following Musk’s public disclosure on April 4, 2022, Twitter’s share price surged by over 27%. Musk ultimately bought Twitter for $44 billion in October 2022, rebranding the platform as X.
Musk’s lawyer, Alex Spiro, dismissed the lawsuit as a “sham” and a “campaign of harassment.” The SEC’s complaint was submitted to a federal court in Washington, D.C., on Tuesday.
Under Mr Gensler’s leadership, the SEC clashed with Musk, who is a close ally of the president-elect.
But Musk had run-ins with the SEC long before Mr Gensler took office.
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.
