SEC Files Bombshell Lawsuit Against Elon Musk Over Twitter Purchase

Billionaire Elon Musk has been sued by the U.S. Securities and Exchange Commission (SEC) for allegedly failing to disclose his stock ownership in Twitter, enabling him to save "at least $150 million."

The SEC claims that Musk did not disclose his Twitter stock ownership in a timely manner in 2022 before acquiring the platform. Musk began purchasing Twitter shares in early 2022, and by March, he owned more than five percent of the company.

According to the complaint, Musk was legally required to disclose his ownership at this point but delayed doing so until April 4—11 days after the deadline. Disclosure filings are crucial for allowing marketplace investors to track significant moves by large shareholders and potential takeover bids, as reported by The New York Times.

In April 2022, Musk signed a deal to acquire Twitter, but when he attempted to back out, the company filed a lawsuit to compel him to complete the purchase.

The SEC stated that beginning in April 2022, it launched an investigation to determine whether securities laws were violated in relation to Musk's Twitter stock purchases, his public statements, and SEC filings concerning the company.

Musk has openly mocked the SEC in recent weeks on social media, sharing a letter from his attorney, Alex Spiro, rejecting a settlement proposal.

On Tuesday, Spiro remarked, "Today's action is an admission by the S.E.C. that they cannot bring an actual case because Mr. Musk has done nothing wrong and everyone sees this sham for what it is." He further accused the SEC of waging a "multiyear campaign of harassment" against Musk and filing a "single-count ticky-tack complaint."

This lawsuit marks the third legal clash between the SEC and Musk. The first occurred in 2016, when Musk's market-moving posts on social media discussed taking Tesla, his electric car company, private.

However, Musk's ongoing battle with the SEC might be cut short as President-elect Trump's inauguration on Monday will lead to SEC Chair Gary Gensler stepping down.

It remains uncertain whether the incoming regulators will continue to pursue the litigation. Trump has announced plans to nominate Paul Atkins, a former SEC commissioner and pro-business conservative, to succeed Gensler.

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