The US Securities and Exchange Commission (SEC) has tech billionaire Elon Musk (53) is sued in connection with his share purchases in the acquisition of Twitter in 2022. The accusation: Musk did not make it public in a timely manner that his stake exceeded the 5 percent mark – and was therefore able to buy more shares cheaper. The SEC conducted a lengthy investigation into the case.
The tech billionaire began buying Twitter shares on the market at the beginning of 2022. The SEC points out in the complaint that its stake reached 5 percent on March 14, 2022. According to US rules, he would have had to make this public within ten calendar days. However, Musk only announced on April 4th – eleven days too late – that he already held 9 percent. The stock price then jumped 27 percent, the SEC showed.
The agency analyzed Musk’s purchases and concluded that he got off more than $150 million cheaper as a result of the late mandatory disclosure. However, the shareholders who sold their shares to him during this time would have suffered financial damage. The SEC is demanding that Musk repay the sum – plus an additional penalty.
SEC gets new leadership under Trump
Musk’s lawyer Alex Spiro (42) countered that his client had “done nothing wrong.” In a statement to the financial service Bloomberg, he also spoke of a years-long “campaign” by the SEC against Musk.
It is unclear how the lawsuit will proceed. Musk is a close confidante of Donald Trump (78), who will be sworn in as the next US President on January 20th. And with the change in the White House, the SEC will also have new leadership. The previous boss Gary Gensler (67) had already withdrawn announced for the day, for him should Paul Atkins take over. It is therefore conceivable that the lawsuit may soon be dropped.
Musk spent a total of around $44 billion on the purchase of Twitter, which was completed in October 2022. He sold his shares in the electric car manufacturer for the majority of the sum Tesla, which is led by him. Musk also took out loans worth around twelve billion dollars. After the acquisition, he converted the service into his online platform X.