Elon Musk is being sued for failing to disclose his purchase of more than 5% of Twitter stock on time. The purchase was made in March 2022. The US Securities and Exchange Commission (SEC) filed the complaint, saying Musk’s delay allowed him to buy Twitter stock at lower prices.
According to court papers filed in Washington DC, the SEC claims the delay caused Musk to underpay by at least $150 million (£123 million). The commission is seeking a civil fine and wants Musk to give up any profits he wasn’t entitled to.
A lawyer for Musk responded, saying, “Mr. Musk has done nothing wrong, and everyone sees this sham for what it is.” SEC rules require investors to disclose if they own more than 5% of a company within 10 calendar days. Musk did not make the disclosure until April 4, 2022, which was 11 days after the deadline. By then, he owned more than 9% of Twitter’s shares. Following the disclosure, Twitter’s share price rose by over 27%.
Musk later bought Twitter for $44 billion (£36 billion) in October 2022 and renamed the platform X. Since then, Musk has been appointed to lead the newly created Department of Government Efficiency (DOGE) with former Republican presidential candidate Vivek Ramaswamy. The president-elect stated that the department’s mission would be to reduce government bureaucracy, cut wasteful spending, and restructure federal agencies.
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