The Securities and Exchange Commission (SEC) has filed a lawsuit against billionaire Elon Musk, accusing him of failing to disclose his sizable Twitter stake within the legally required timeframe in 2022. This alleged delay, the SEC claims, allowed Musk to purchase Twitter shares at below-market prices, unfairly disadvantaging other investors and saving him at least $150 million.
The complaint, filed in a Washington, D.C., federal court, alleges Musk exceeded the 5% ownership threshold in Twitter stock in March 2022, triggering an obligation to publicly report his holdings within ten days. Instead, the SEC asserts, Musk delayed his disclosure by more than 10 days, finally announcing his stake on April 4, 2022. The announcement caused Twitter’s stock to surge by over 27% in a single day.
During the delay, the SEC alleges Musk continued buying shares, ultimately amassing over 9% of Twitter’s stock while paying prices the agency claims were artificially low. According to the SEC, this omission not only violated securities laws but also harmed the “unsuspecting public” by allowing Musk to “underpay” for shares. The lawsuit seeks a jury trial and demands Musk repay the alleged financial gains, along with civil penalties.
Musk’s legal team has strongly denied the allegations, dismissing the suit as a baseless attack. His lawyer, Alex Spiro, described the lawsuit as part of a broader campaign of harassment against Musk and called the claims “meritless.”
In a statement posted to X (formerly Twitter), Musk did not mince words, labeling the SEC a “broken organization” more focused on trivial issues than on addressing real crimes. Musk’s criticism comes amid growing tensions with the regulatory agency, which has scrutinized his business dealings multiple times in recent years.
The SEC lawsuit adds another chapter to Musk’s turbulent relationship with the agency. This isn’t his first run-in; in 2018, the SEC accused him of making misleading statements about taking Tesla private, resulting in a settlement that included $40 million in fines and changes to Tesla’s corporate oversight.
Musk’s high-profile acquisition of Twitter, finalized in late 2022 for $44 billion, has been mired in controversy. After initially building up his stake, Musk oscillated between joining the company’s board and attempting to back out of the deal, citing concerns over fake accounts on the platform. Ultimately, Musk followed through, walking into Twitter’s headquarters in October 2022 with a sink in hand to signal his arrival.
