The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, claiming he failed to follow legal requirements when acquiring Twitter stock in early 2022.
Musk responded to the lawsuit in a January 15 post on X, calling the SEC a “broken organization” and criticizing its focus on cases like his instead of other issues.
According to the filing on January 14, The agency alleges Musk did not report that he owned over 5% of Twitter’s shares within the required timeframe, which allowed him to keep buying shares at lower prices before the market adjusted to the news.
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The SEC says Musk reached the 5% ownership threshold on March 14, 2022, but delayed filing the disclosure until April 4. Twitter’s stock price surged by more than 27% on the day his ownership became public.
According to the SEC, this delay allowed Musk to purchase additional shares at prices that did not reflect the market impact of his stake, which saved him at least $150 million.
Between March 24 and April 4, Musk reportedly spent over $500 million on Twitter stock. The SEC alleges that this buying activity occurred before investors knew the full extent of his stake, which put other shareholders at a disadvantage.
The agency is seeking a jury trial, financial penalties, and repayment of what it calls Musk’s “unjust enrichment”.
Meanwhile, on January 13, the SEC imposed a $45 million penalty on the crypto trading platform Robinhood. What happened? Read the full story.
