The U.S. Securities and Exchange Commission (SEC) announced on Tuesday that it is suing tech billionaire Elon Musk. The lawsuit alleges that Musk failed to disclose his ownership of more than 5 percent of Twitter shares in a timely manner prior to his acquisition of the company in 2022. According to the SEC, Musk began purchasing Twitter shares in early 2022 and crossed the 5 percent threshold on March 14, 2022.
Under the law, Musk was required to publicly disclose this ownership within 10 calendar days. However, he did not announce that he held 9 percent of the company until April 4, which was 11 days late, according to the SEC. Following this disclosure, Twitter’s share price reportedly surged by 27 percent. The SEC’s filing further claims that Musk “underpaid by at least 150 million dollars for his purchases of Twitter common stock during this period,” suggesting that shareholders who sold him their shares may have incurred financial losses.
In response to the lawsuit, Musk’s lawyer, Alex Spiro, asserted that the tech billionaire had “done nothing wrong.” Spiro also described the SEC’s actions as part of a “multi-year campaign of harassment” against Musk. The future of the lawsuit remains uncertain, particularly as Musk is a close confidant of Donald Trump, who is set to be inaugurated as the next U.S. president on January 20. This transition in administration will likely bring changes in leadership at the SEC, as the current chairman, Gary Gensler, has already announced his intention to resign.
Musk completed his acquisition of Twitter in October 2022 for $44 billion and subsequently rebranded the platform as X.
Comments are closed for this story.