Elon Musk Faces SEC Lawsuit Over Alleged Stock Disclosure Violations
In a legal move that has captured widespread attention, the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against billionaire Elon Musk. The SEC claims Musk did not disclose his substantial ownership of Twitter stocks in a timely manner during the early months of 2022, just before he acquired the social media platform.
The SEC’s allegations suggest that Musk’s delayed disclosure allowed him to purchase Twitter shares at a lower price, specifically underpaying by “at least $150 million” for shares bought after his ownership of more than 5% of the company should have been made public. Elon Musk ultimately acquired Twitter in October 2022, subsequently rebranding it to X.
The timeline of events, according to the SEC’s complaint, begins in early 2022 when Musk started accumulating Twitter shares. By March of that year, his ownership exceeded 5%, triggering a legal obligation to disclose this information. However, Musk reportedly delayed this disclosure until April 4, 11 days past the required deadline.
Efforts to obtain comments from representatives of X and Musk were unsuccessful as they did not immediately respond to inquiries.
After initially agreeing to buy Twitter in April 2022, Musk attempted to retract his commitment, prompting Twitter to file a lawsuit to enforce the acquisition agreement. This series of events led the SEC to authorize an investigation in April 2022, examining whether Musk’s actions and related statements violated securities laws.
Preceding the current lawsuit, the SEC sought court intervention to compel Musk to provide testimony as part of their ongoing investigation into his Twitter stock acquisitions.
With the SEC’s current chair, Gary Gensler, set to resign on January 20, the future of the lawsuit remains uncertain, dependent on the incoming administration’s stance.
This article was originally written by www.npr.org
