The US Securities and Exchange Commission has filed a lawsuit against billionaire Elon Musk, saying he failed to timely disclose his ownership of Twitter shares in early 2022, before purchasing the social media site.
As a result, the SEC alleges that Musk was able to pay “at least $150 million” less for the stock he bought after he should have disclosed his ownership of more than 5 percent of Twitter shares. Musk bought Twitter in October 2022 and later renamed it X.
Musk began accumulating Twitter shares in early 2022, and by March of that year, he owned more than 5 percent. At this point, the complaint says, he was required by law to disclose his ownership, but failed to do so until April 4, 11 days after the report was due.
Alex Spiro, Musk’s lawyer, said in a statement that the lawsuit “is an admission by the SEC that they cannot bring an actual case” because Musk “did nothing wrong.”
He called the lawsuit “false.”
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“With the SEC backing down and leaving office – the SEC’s multi-year harassment campaign against Mr. Musk culminated in the filing of an individual complaint against Mr. Musk under Section 13(d) for an alleged administrative failure to file a complaint. Spiro added: “One form – a crime, even if proven, carries a symbolic penalty.”
After Musk signed the Twitter acquisition deal in April 2022, he tried to back out of it, prompting the company to sue him to force him to go ahead with the acquisition.
The SEC said that as of April 2022, it had authorized an investigation into whether any securities laws were violated in connection with Musk’s purchases of Twitter stock, his statements, and SEC filings related to the company.
Before filing the lawsuit, the SEC went to court in an attempt to force Musk to testify as part of the investigation into his purchase of Twitter.
The current SEC Chairman, Gary Gensler, plans to step down on January 20, and it is not clear whether the new administration will pursue the lawsuit.
& Edition 2025 The Canadian Press
