Last September, the SEC also sought sanctions against Musk for missing testimony in the Twitter investigation.
The US Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk, accusing him of concealing information about the purchase of a large stake in Twitter in 2022, which he later acquired for a very long time. Reuters wrote this on Tuesday, January 14.
In the case filed in federal court in Washington, the SEC alleges that Musk violated federal securities laws because he delayed disclosing his first purchase of a 5% stake in Twitter by 11 days.
According to SEC rules, investors are required to report crossing the 5% ownership threshold within 10 calendar days. In Musk’s case, this date is March 24, 2022.
Musk didn’t announce his purchases until April 4, 2022, by which time he already owned 9.2% of the company’s shares. During that time, he bought more than $500 million worth of Twitter shares at artificially low prices, hurting other investors, the SEC said.
Following the disclosure of his stake, Twitter’s share price rose more than 27%.
The SEC is asking Musk to pay a fine and repay the proceeds he allegedly received illegally.
Elon Musk, who acquired Twitter for $44 billion in October 2022 and renamed it X, his lawyer Alex Spiro called the lawsuit part of a multi-year harassment campaign by the SEC.
“Today’s action by the SEC is an admission that they cannot file real charges. The charges relate only to an administrative violation – late filing of a form, which, even if proven, requires only a small fine,” the lawyer said.
The SEC filed this lawsuit six days before Donald Trump’s inauguration. SEC Chairman Gary Gensler will resign the same day.
The European Union has pledged to speed up its investigation into Elon Musk’s social platform X over suspected violations of the Digital Services Act.
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.