Elon Musk was sued by the U.S. Securities and Exchange Commission (SEC) on Tuesday, January 14, for allegedly failing to disclose his 2022 acquisition of a sizable interest in Twitter.
Musk allegedly waited 11 days to disclose that he had purchased 5% of the company’s shares, in violation of federal securities regulations. Musk is accused of breaking Section 13(d) of the Exchange Act and associated regulations in the SEC’s complaint, which was submitted to the U.S. District Court for the District of Columbia.
Because Elon Musk delayed disclosing his Twitter stakes, the SEC sued him. According to the SEC, Elon Musk information. He was able to purchase more than $500 million worth of Twitter shares at inflated prices because to the delayed announcement. Twitter’s stock price surged 27% on April 4, 2022, when Musk officially revealed his acquisitions.
Musk is accused of making money off of cheap Twitter shares. The lawsuit aims to compel Musk to reimburse revenues that he allegedly unjustly received and pay a civil penalties. In October 2022, Musk paid $44 billion to acquire Twitter, which he then rebranded as X.
According to the SEC’s lawsuit, investors sold Twitter shares at artificially low prices between March 25, 2022, and April 1, 2022, as a consequence of Musk’s failure to submit a timely beneficial ownership report. The SEC claims that this resulted in those investors suffering large financial losses.
In his response to the complaint, Musk referred to the SEC as a “totally broken organization” on his platform, X (previously Twitter), and criticized the government for concentrating on one matter while other, more significant crimes remain unsolved. Musk has continuously avoided coming to court, leaving legal problems to his attorneys in spite of this protracted legal struggle.
Days before Gary Gensler, the current SEC head, announced his resignation on January 20, the SEC filed the complaint. Many of Gensler’s activities are anticipated to be examined by his replacement, Paul Atkins, who was chosen by Trump.
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