The U.S. Securities and Exchange Commission (SEC) has sued billionaire Elon Musk, alleging that he failed to disclose his ownership of Twitter stock in a timely manner in early 2022, and later acquiring shares in the company at “artificially low prices”.
What does the suit say?
According to the suit, filed in federal court in Washington D.C. for alleged securities violations, Musk did not disclose in a timely manner that he had acquired a 5 percent stake in the company, which allowed him “to underpay by at least $150 million for shares he purchased after his financial beneficial ownership report was due”.
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Musk bought Twitter in 2022 for $44 billion and later renamed it X. Before the purchase, Musk purchased a 5 percent stake in the company, a transaction which usually requires a public disclosure.
The SEC alleges that Musk disclosed his ownership only 11 days after the report was due.
The SEC rule requires investors to disclose within 10 calendar days when they cross a 5 percent ownership threshold. Twitter’s share price rose more than 27 percent following Musk’s disclosure, the SEC said.
Musk’s response
The lawsuit “is an admission by the SEC that they cannot bring an actual case” since Musk has “done nothing wrong”, said Musk’s lawyer Alex Spiro, calling the case a “sham”.
Musk had signed a deal to acquire Twitter in April 2022, and later tried to back out of it. This caused the company to sue him to force him to go ahead with the deal.
Musk, an adviser to U.S. president-elect Donald Trump, is the world’s richest man with a total net worth of $427 billion, according to Bloomberg. Musk also runs companies such as electric car maker Tesla and rocket company SpaceX.
Musk also runs companies such as electric car maker Tesla and rocket company SpaceX.
