The SEC has sued Elon Musk, alleging he failed to disclose a major Twitter stock purchase within the required timeframe.
The U.S. Securities and Exchange Commission (SEC) has sued Elon Musk, accusing him of failing to disclose his purchase of Twitter shares within the legally mandated timeline.
The lawsuit, filed in federal court in Washington on Jan. 14, centers on Musk’s acquisition of more than 5 percent of Twitter’s common stock in early 2022, a transaction that was not publicly disclosed until weeks later. Federal securities law requires investors who acquire more than 5 percent of a company’s stock to file a disclosure with the SEC within 10 days.
The SEC alleges in the complaint that by filing the disclosure 11 days past the mandated deadline, Musk was able to underpay by at least $150 million for subsequent tranches of stock that he bought before filing the required disclosure on April 4, 2022.
The agency noted in the complaint that Twitter shares surged in price by 27 percent after Musk filed the required disclosure and, by that time, he already owned 9 percent of the social media giant’s shares.
“Investors who sold Twitter common stock during this period did so at artificially low prices and thus suffered substantial economic harm,” the complaint states.
The SEC wants the court to impose a civil fine on Musk and to force him to disgorge any profits that he incurred due to the late filing.
Musk’s attorney, Alex Spiro, told The Epoch Times in an emailed statement that his client did nothing wrong and labeled the SEC’s lawsuit as a “sham.”“Today’s action is an admission by the SEC that they cannot bring an actual case,” Spiro wrote, adding that Musk “has done nothing wrong and everyone sees this sham for what it is.”
Spiro accused the SEC of running a “multi-year campaign of harassment” against Musk and insisted the agency was blowing the alleged late disclosure filing out of proportion, adding that this type of infraction carries a nominal penalty.
By Tom Ozimek
