SEC’s Gensler Sues Elon Musk Over Delayed Twitter Stake Disclosure, Days Before Resignation
U.S. Securities and Exchange Commission (SEC) files lawsuit Elon Musk accused him on Tuesday (January 14) of waiting too long to disclose his 2022 purchase of a large stake in Twitter. Musk, who was charged with violating federal securities laws, took 11 days to disclose that he had acquired a 5% stake in the company. The U.S. Securities and Exchange Commission (SEC) filed a lawsuit in the U.S. District Court for the District of Columbia, accusing Musk of violating Section 13(d) of the Exchange Act and related rules.
The SEC alleged that Musk’s delay in disclosing information allowed him to purchase more than $500 million worth of Twitter stock at artificially low prices. When Musk finally announced the acquisition on April 4, 2022, Twitter shares rose 27%.
The lawsuit seeks to force Musk to pay civil penalties and return profits he allegedly unfairly gained. Musk subsequently acquired Twitter for $44 billion in October 2022 and later renamed the company X. The SEC’s complaint alleges that Musk failed to timely file beneficial ownership reports, causing investors to sell Twitter stock between March 25 and April 1, 2022. In 2022, prices will be artificially low. According to the SEC, this resulted in significant financial losses for these investors.
Musk responded to the lawsuit on his platform While the legal battle continues, Musk has avoided appearing in court, leaving legal matters to his attorneys.
The SEC’s lawsuit comes just days after current SEC Chairman Gary Gensler will resign on January 20. Paul Atkins, Trump’s nominee to succeed him, is expected to review many of Gensler’s actions.
