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SEC Sues Elon Musk For Failure To Disclose Twitter Stake
- The US SEC has taken legal action against Elon Musk of X (formerly Twitter) for failing to disclose ownership of Twitter stock when buying the social media site.
- Musk first acquired a 5% stake in Twitter in March 2022, later revealing that he had increased his shareholding to 9.2%. In April 2022, Musk announced a takeover offer for Twitter, which led to lawsuits by disgruntled shareholders.
- The SEC began investigating Musk’s disclosure of his stake in Twitter in May 2022, but it wasn’t until September 2024 that the SEC warned it would sanction him. In October that year, Musk declined to attend an interview mandated by the federal court.
- The lawsuit alleges that Musk underpaid for Twitter shares by $150m after failing to disclose his ownership of more than 5% of the shares. Musk’s lawyer, Alex Spiro, claims that Musk has done nothing wrong, calls the lawsuit a “sham” and suggests it is an admission by the SEC that they cannot bring an actual case.
- Musk and the SEC have a troubled past that began when Musk tweeted in August 2018 about his consideration of taking Tesla private.
- Elon Musk has suffered a fresh setback as Reuters reports that Judge Alison Nathan of the US District Court in Manhattan has rejected his request that a shareholder lawsuit against him be dropped.
- The shareholders, who sued Musk over his tweets about Tesla in August 2018, claim that he made false and misleading statements, which inflated Tesla’s share price and hurt investors who bet against the company.
- Musk has publicly expressed his disdain for the SEC and other regulatory agencies in the past, once referring to it in a tweet as the “Shortseller Enrichment Commission” in October 2018.
- The SEC has closed the Big Bang Crypto lawsuit against Ripple. The financial regulator has also agreed that its regulatory oversight extends no further than the sale of XRP in the US.
- It has been announced that Tesla CEO Elon Musk is set to step down from his post as company chairman as part of an SEC settlement over fraud charges.
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