Deadline Dilemma
The lawsuit claims Musk waited to publicly reveal his purchases of company stock in order to buy shares at lower prices
The Securities and Exchange Commission sued Elon Musk, claiming the world’s richest person of deliberately waiting too long to disclose his purchase of more than five percent of Twitter shares in 2022.
Alex Spiro, a lawyer for Musk, told Reuters that the lawsuit was the culmination of the SEC’s “multi-year campaign of harassment” against the billionaire. “Today’s action is an admission by the SEC that they cannot bring an actual case,” said Spiro in a statement. “Mr. Musk has done nothing wrong and everyone sees this sham for what it is.”
SEC rules require investors who buy more than five percent of a company’s shares to disclose their stakes within 10 days of purchase. The agency is accusing Musk of buying more than $500 million worth of Twitter stock at “artificially low prices” before filing his report 11 days later on April 4, 2022, when he owned more than nine percent of the company’s outstanding common stock. According to the suit, Twitter’s share price surged to 27 percent following the public disclosure.
According to the complaint filed Tuesday in D.C. District Court, the SEC has requested that Musk be ordered to pay a civil penalty and return profits, which the agency claims he unjustly acquired from his stock buys.
After the complaint was filed, Musk took to X and called the SEC a “totally broken organization” that is spending “their time on shit like this when there are so many actual crimes that go unpunished.”
Musk, who eventually purchased Twitter for $44 billion and rebranded the platform to X, was charged by the SEC in September 2018 with making “false and misleading” statements when he announced in a tweet that he was considering taking Tesla private and had the funding to complete the transaction. The deal never happened. Musk and Tesla settled the suit, paying $20 million each, and revised it in 2019.