Elon Musk is facing a lawsuit from the U.S. Securities and Exchange Commission (SEC) over his acquisition of Twitter, now rebranded as X. The SEC alleges that Musk failed to disclose his ownership of Twitter stock on time in early 2022, enabling him to underpay “by at least $150 million” for shares purchased after surpassing the 5% ownership threshold.
According to the complaint, Musk began acquiring Twitter shares in early 2022 and owned more than 5% by March. However, he delayed the legally required disclosure of his stake until April 4, 11 days past the deadline.
Musk finalized his Twitter purchase in October 2022, but the SEC claims his delayed disclosure violated securities laws.
Musk’s attorney, Alex Spiro, dismissed the lawsuit as baseless, describing it as a “sham” and an attempt to cover up the SEC’s inability to present a substantial case. He criticized the lawsuit for focusing on an alleged administrative oversight, calling it a “nominal offense.”
The SEC began investigating Musk’s actions in April 2022, including his stock purchases, statements, and filings related to Twitter. Before filing the lawsuit, the SEC sought a court order to compel Musk to testify as part of the investigation.
Musk had previously attempted to back out of the acquisition deal after signing it in April 2022, prompting Twitter to sue him to enforce the agreement.
The SEC’s current chair, Gary Gensler, is set to step down on January 20, and it remains unclear whether the new administration will continue pursuing the case against Musk.
