Elon Musk Faces SEC Lawsuit Over Twitter Stock Disclosures
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that he failed to disclose his ownership of Twitter stock in a timely manner prior to purchasing the social media platform. The SEC claims that Musk's late disclosure allowed him to underpay by at least $150 million for shares bought after he should have revealed that he owned more than 5% of Twitter.
Musk began acquiring Twitter shares in early 2022, and by March of that year, he had surpassed the 5% threshold requiring a disclosure under federal securities law. However, he did not make the necessary announcement until April 4, 2022—11 days past the deadline.
Musk's attorney, Alex Spiro, criticized the lawsuit as an "admission" by the SEC that their case is weak, asserting that Musk has "done nothing wrong." He referred to the complaint as a trivial issue regarding an administrative failure and labeled it a "sham."
The SEC initiated an investigation into Musk's stock purchases starting in April 2022, coinciding with Musk's attempt to back out of his planned acquisition of Twitter, which ultimately led to a legal battle to enforce the deal. With the SEC Chair, Gary Gensler, set to step down on January 20, it remains uncertain whether the incoming administration will pursue this lawsuit.
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