Elon Musk is facing legal action from the US Securities and Exchange Commission (SEC) for allegedly breaking securities laws when acquiring Twitter stock in early 2022. According to the SEC, Musk did not file a timely report about owning more than 5% of Twitter’s shares, as required by law. This omission enabled him to purchase additional shares at a lesser price, resulting in a considerable financial gain.
According to the SEC’s complaint, Musk owned more than 5% of Twitter stock by March 2022, but he failed to disclose this ownership until April 4, 2022, 11 days after the necessary filing deadline. Musk allegedly saved at least $150 million by continuing to buy shares at artificially low rates due to the delay.
Just before the SEC’s leadership changes, Musk filed the case. Musk responded by dismissing the complaint as unfounded, calling the SEC a “totally broken organization” and slamming its attention on his case over more critical problems.
Musk’s legal team has also referred to the complaint as a “sham,” alleging that the SEC’s long-running efforts against Musk have finally resulted in a weak case. They believe that Musk has done nothing wrong and that the SEC’s complaint is without merit.
This court dispute is part of a larger set of activities stemming from Musk’s $44 billion purchase of Twitter in 2022, during which time he took the firm private, renamed it X, and significantly altered its operations and content standards. The SEC seeks both financial penalties and a jury trial.
