Elon Musk, owner of X, is facing a lawsuit from the Securities and Exchange Commission (SEC) over his delayed disclosure of Twitter stock holdings. The regulator claims Musk improperly waited 11 days to file a beneficial ownership report, known as a 13D filing, and saved himself at least $150 million in the process.
According to the SEC, Musk’s wealth manager bought large blocks of Twitter stock starting in January 2022, but did not exceed the 5% threshold. When asked if he wanted more stock, Musk’s advisor told him to keep buying, and Musk continued to buy shares until March 14, when he owned over 7% of the company.
However, instead of filing a disclosure report on March 24, as required by regulations, Musk waited until April 4 to do so. During this 11-day period, Musk bought an additional $500 million worth of Twitter stock at artificially low prices, resulting in him underpaying for the shares by over $150 million.
The SEC alleges that if Musk had filed the disclosure report on time, Twitter’s stock price would have been higher, causing “substantial economic harm” to investors who sold their shares during this period. Musk’s lawyer, Alex Spiro, has called the lawsuit a “sham” and claimed that the SEC is trying to harass Musk.
This lawsuit marks the latest in a bitter back-and-forth between Musk and the SEC over disclosures, tweets, and other disagreements. The SEC’s action comes just five weeks after Musk publicly challenged departing SEC chair Gary Gensler on X, accusing him of harassment.
Source: https://fortune.com/2025/01/14/sec-sues-elon-musk-lawyer-complaint-disclosure-x-twitter-stock-investor