The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that the billionaire earned over $150 million by delaying the disclosure of his significant stake in Twitter, now known as X. The suit claims Musk violated federal securities laws by failing to report his acquisition of Twitter shares within the required timeline.
Under SEC regulations, investors are required to disclose their stake within 10 days of surpassing a 5% ownership threshold. According to the complaint, Musk reached this threshold on March 14, 2022, but waited until April 4, 2022, to publicly disclose his 9.2% stake. During this time, Twitter’s stock price surged, allegedly allowing Musk to buy additional shares at a lower price and profiting from the market’s reaction once the disclosure was made.
“This delay deprived investors of critical information and gave Musk an unfair advantage in the market,” the SEC stated. “His actions undermined the transparency essential to a fair and efficient market.”
Musk’s attorneys have dismissed the lawsuit as “unfounded,” arguing that the delay was unintentional and did not cause harm to other investors. “Elon Musk has always acted within the boundaries of the law,” his legal team stated. “This lawsuit is nothing more than an attempt to vilify a successful entrepreneur.”
The case marks yet another clash between Musk and federal regulators. In recent years, the Tesla and SpaceX CEO has faced scrutiny over his social media activity, particularly tweets that have had significant impacts on stock prices.
The lawsuit could have broader implications for corporate governance and market transparency, as the SEC seeks to hold high-profile figures accountable for adhering to disclosure rules. Legal experts predict a lengthy legal battle, with potential penalties for Musk if the allegations are proven in court.
As the case unfolds, it raises questions about the balance of power between regulators and influential figures in the tech and financial worlds, with Musk once again at the center of the debate.
