The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of failing to disclose his growing stake in Twitter, which allowed him to acquire shares at “artificially low prices.”
The SEC claims Musk saved $150 million by not reporting his acquisition of more than 5% of Twitter’s stock within the required 10-day period, doing so 21 days after the fact.
In response, Musk criticized the SEC as a “totally broken organisation” and accused the regulator of focusing on minor infractions while “actual crimes” go unpunished.
He further labeled the lawsuit as a “sham” and a “campaign of harassment” against him, according to his lawyer, Alex Spiro.
The SEC alleges that Musk’s delayed disclosure led to significant harm to investors. Twitter’s stock price surged by over 27% when Musk’s purchase was revealed on April 4, 2022.
Musk later acquired the platform for $44 billion in October 2022 and renamed it X.
The SEC’s complaint, filed in a federal court in Washington DC, seeks to have Musk forfeit “unjust profits” and pay a fine.
Additionally, it was announced that SEC chair Gary Gensler will resign on January 20, following comments from President-elect Donald Trump about firing him.
Musk’s conflicts with the SEC date back to 2018 when the agency charged him with misleading investors regarding the funding for a potential private buyout of Tesla, which led to a settlement that required him to step down as Tesla’s chairman and agree to restrictions on his social media posts about the company.
Source-BBC
