Elon Musk has been sued by the Securities and Exchange Commission (SEC) over his late disclosure of buying a 9% stake in Twitter in 2022. The lawsuit alleges that Musk failed to report this stake within 10 days, as required by US law, allowing him to purchase shares at artificially low prices.
The SEC claims that Musk underpaid Twitter investors by at least $150 million and caused them significant economic harm. This was due to the fact that he spent over $500 million purchasing additional shares during the period when he failed to disclose his beneficial ownership. As a result of this, investors who sold their Twitter stocks during this time did so at low prices.
The lawsuit states that Musk’s actions resulted in a 27% increase in Twitter’s stock price after he finally disclosed his stake. The SEC says that Musk had refused an offer from the agency to settle the case with a fine and has also denied claims of harassment, calling them “political dirty work”.
Source: https://arstechnica.com/tech-policy/2025/01/sec-sues-elon-musk-says-he-cheated-twitter-investors-out-of-150-million