Elon Musk Faces SEC Lawsuit Over Delayed Twitter Stake Disclosure

Washington, DC:  Elon Musk has been hit with a lawsuit by the US Securities and Exchange Commission (SEC) over his failure to promptly disclose his 2022 purchase of a large stake in Twitter. The SEC alleges that Musk violated federal securities laws by delaying the disclosure of his initial 5% stake in the company, which should have been reported within 10 days, but he disclosed it 11 days late.

The SEC argues that this delay, which resulted in Musk owning 9.2% of Twitter before making his purchase known, caused harm to unsuspecting investors. The delay allowed Musk to acquire over $500 million worth of Twitter shares at artificially low prices, causing Twitter’s stock to jump by more than 27% once Musk made the disclosure on April 4, 2022.

This lawsuit, filed in a Washington, DC federal court, demands Musk to pay a civil fine and forfeit profits tied to his purchase. Musk, defending his actions, calls the lawsuit a baseless attack from the SEC, referring to it as part of a "multi-year campaign of harassment." He dismissed the delay as a minor administrative failure, claiming no intention of defrauding investors.

Musk's purchase of Twitter for $44 billion later in 2022, which he later rebranded as X, followed a string of legal battles, including one with former Twitter shareholders regarding the late disclosure. Despite his defenses, the SEC lawsuit adds to a long history of legal issues Musk has faced with the regulatory body.

As the legal saga unfolds, Musk continues to clash with the SEC, following previous disputes over his social media statements related to Tesla in 2018 and later litigation over court-ordered testimonies. Stay tuned for more updates on this ongoing case.