The U.S. Securities and Exchange Commission (SEC) has accused Elon Musk of failing to disclose his 2022 Twitter stock purchases in a timely manner, violating federal securities laws.
SEC's Allegations Against Musk
The lawsuit was filed on Tuesday, January 14, in the U.S. District Court for the District of Columbia. Musk is accused of violating Section 13(d) of the Exchange Act and related rules by waiting 11 days before revealing he had acquired 5% of Twitter's shares.
Consequences of Delayed Disclosure
The SEC claims that Musk's delay allowed him to buy over $500 million worth of Twitter shares at artificially low prices. When Musk announced his purchases on April 4, 2022, Twitter's share price surged 27%. The lawsuit seeks to force Musk to pay a civil fine and return profits he allegedly gained unfairly.
Musk's Response and Developments
Musk has responded to the lawsuit on his platform, X, calling the SEC 'a totally broken organization' and criticizing the agency for focusing on this issue while other more serious crimes go unpunished. Despite the legal battle, Musk has consistently avoided court appearances, delegating matters to his lawyers. The lawsuit was filed just days before SEC chair Gary Gensler steps down on January 20. His successor, Paul Atkins, nominated by Trump, is expected to review many of Gensler's actions.
The legal battle between Elon Musk and the SEC continues to draw attention and spark discussions among business sectors and the public.
