The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing the billionaire of failing to disclose his acquisition of a significant stake in Twitter within the required time frame.
The regulator alleged that this delay allowed Musk to buy shares at “artificially low prices”, saving him $150m (£123m).
Under SEC rules, investors must report holdings exceeding 5% within 10 days. The lawsuit claims that Musk waited 21 days after crossing the threshold to make his purchase public. According to the SEC, this delay caused “substantial economic harm to investors.”
Musk, who acquired Twitter for $44 billion in October 2022 and renamed it X, criticized the regulator in a social media post, calling it a “totally broken organization” that wastes time on lawsuits while “so many real crimes …they go unpunished.”
In a statement to BBC News, Musk's lawyer, Alex Spiro, dismissed the case as a “sham” and “a campaign of harassment” against his client.
The SEC filing, filed in federal court in Washington DC, seeks to force Musk to give up “unfair” profits and pay a fine. The regulator also highlighted how Twitter's share price increased by more than 27% after Musk revealed his stake on April 4, 2022.
This is not Musk's first conflict with the SEC. In 2018, the regulator accused him of misleading investors over claims he had “funding secured” to take Tesla private. Musk settled the charges, resigned as chairman of Tesla's board of directors and agreed to restrictions on his social media activity about the company.
The SEC has faced its own political challenges under its current director, Gary Gensler. President-elect Donald Trump recently vowed to remove Gensler on his first day in office.
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