SEC sues Elon Musk over Twitter stake disclosure, says shareholders lost $150M

18 hrs ago

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Lauren Taylor Anchor/Reporter

By Lauren Taylor (Anchor/Reporter), Zachary Hill (Video Editor)

The United States Securities and Exchange Commission (SEC) has filed a lawsuit against tech mogul Elon Musk, claiming that Musk failed to disclose his stake in social media giant Twitter in a timely manner in 2022. Musk, the CEO of Tesla and SpaceX, purchased Twitter in October 2022 and later rebranded the platform as X.

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Earlier that year, Musk began purchasing Twitter shares. The complaint alleges that Musk owned more than 5% of the company by March 2022.

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The SEC says the law required Musk to disclose his Twitter holdings. They allege that he did not disclose this information until April 4, 2022 –– 11 days after the beneficial ownership report due date had passed.

“Musk saved at least $150 million at the expense of Twitter shareholders by failing to timely file the beneficial ownership report,” according to the SEC.

In a post on X, Musk responded to the lawsuit. He called the SEC a “totally broken organization” and defended himself. He said, “They spend their time on s*** like this when there are so many actual crimes that go unpunished.”

Musk’s lawyer, Alex Spiro, called the lawsuit a “sham.” Spiro said in a statement to the Associated Press that the suit “is an admission by the SEC that they cannot bring an actual case” since Musk has “done nothing wrong.”

Meanwhile, current SEC Chair Gary Gensler, who has been serving since 2021, plans to step down on Jan. 20 when President-elect Donald Trump takes office.

It’s unlikely the new administration will pursue the lawsuit. Musk has been appointed to lead Trump’s “Department of Government Efficiency” during his second term in office.

Tags: Elon Musk, Securities and Exchange Commission, Twitter

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION FILED A LAWSUIT AGAINST TECH MOGUL ELON MUSK CLAIMING MUSK FAILED TO DISCLOSE HIS STAKE IN SOCIAL MEDIA GIANT TWITTER DURING 2022 IN A TIMELY MANNER.

THE TESLA AND SPACEX CEO PURCHASED TWITTER IN OCTOBER 2022, LATER RENAMING THE PLATFORM TO X.

EARLIER THAT YEAR MUSK STARTED PURCHASING TWITTER SHARES. THE COMPLAINT ALLEGES MUSK OWNED MORE THAN 5% OF THE COMPANY BY MARCH OF THAT YEAR.

THE SEC SAYS MUSK WAS REQUIRED BY LAW TO DISCLOSE HIS TWITTER HOLDINGS AND ALLEGES MUSK DID NOT DISCLOSE THIS INFORMATION UNTIL APRIL 4TH – 11 DAYS AFTER THE BENEFICIAL OWNERSHIP REPORT DUE DATE HAD ALREADY LAPSED.

“MUSK SAVED AT LEAST $150 MILLION AT THE EXPENSE OF TWITTER SHAREHOLDERS BY FAILING TO TIMELY FILE THE BENEFICIAL OWNERSHIP REPORT,” ACCORDING TO THE SEC.

IN A POST ON X, MUSK RESPONDED TO THE LAWSUIT CALLING THE SEC A “TOTALLY BROKEN ORGANIZATION” DEFENDING HIMSELF SAYING “THEY SPEND THEIR TIME ON S*** LIKE THIS WHEN THERE ARE SO MANY ACTUAL CRIMES THAT GO UNPUNISHED.”

MUSK’S LAWYER, ALEX SPIRO, CALLING THE LAWSUIT AGAINST MUSK A “SHAM” SAID IN A STATEMENT TO THE ASSOCIATED PRESS THAT THE SUIT “IS AN ADMISSION BY THE SEC THAT THEY CANNOT BRING AN ACTUAL CASE” SINCE MUSK HAS “DONE NOTHING WRONG.”

MEANWHILE, CURRENT SEC CHAIR, GARY GENSLER, WHO HAS BEEN SERVING IN HIS ROLE SINCE 2021, PLANS TO STEP DOWN FROM HIS POSITION ON JANUARY 20TH – WHEN PRESIDENT-ELECT TRUMP TAKES OFFICE.

IT’S UNLIKELY THE NEW ADMINISTRATION WILL PURSUE THE LAWSUIT, GIVEN THAT MUSK HAS BEEN APPOINTED TO LEAD TRUMP’S “DEPARTMENT OF GOVERNMENT EFFICIENCY” DURING HIS SECOND TERM IN OFFICE.