The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, founder of Tesla Inc., over alleged violations related to his acquisition of Twitter (now X) in October 2022 for $44 billion.
In the suit filed at a federal court in Washington, DC, the SEC claims Musk failed to disclose his ownership of more than 5 percent of Twitter’s shares within the required timeframe. The agency alleges this delay allowed Musk to purchase Twitter stock at artificially low prices, ultimately misleading investors.
According to the SEC, Musk was obligated to disclose his growing stake in Twitter by March 24, 2022, but he delayed until April 4, 2022, after his ownership had grown to 9.2 percent. During this period, Musk reportedly acquired over $500 million in shares at undervalued prices, saving him over $150 million.
“When Musk and his wealth manager finally disclosed his ownership, Twitter’s stock surged by more than 27 percent,” the SEC stated in its filing. “Had Musk disclosed his ownership as required, the stock price would likely have increased significantly earlier.”
The SEC seeks civil penalties and demands Musk disgorge any profits gained from the delay. The agency argues that Musk’s actions violated transparency principles central to U.S. securities laws and undermined investor trust.
In response, Musk dismissed the lawsuit, calling the SEC “totally broken” in a post on X, the platform he now owns.
“They spend their time on s— like this when there are so many actual crimes that go unpunished,” Musk wrote, accusing the regulatory body of prioritizing trivial issues over serious crimes.
