The US Securities and Exchange Commission or SEC has filed a lawsuit against Elon Musk, the world's richest person, alleging that he violated securities law related to his $44 billion acquisition of Twitter (now X).
The complaint alleges that Elon Musk “failed to timely file with the SEC a beneficial ownership report” which discloses his purchase of Twitter shares before he announced his ownership of the company.
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Elon Musk had started acquiring Twitter shares in early 2022, and by March that year, he ended up owning more than 5% of the social media giant, news agency Associated Press reported.
The SEC's complaint says Musk was required by law to disclose his ownership, which he failed to do so until April 4. This was 11 days after the report was due.
"As a result, Musk was able to continue purchasing shares at artificially low prices, allowing him to underpay by at least $150 million for shares he purchased after his beneficial ownership report was due," a Business Insider report quoted the complaint as saying.
{{/usCountry}}"As a result, Musk was able to continue purchasing shares at artificially low prices, allowing him to underpay by at least $150 million for shares he purchased after his beneficial ownership report was due," a Business Insider report quoted the complaint as saying.
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"Today's action is an admission by the SEC that they cannot bring an actual case — because Mr. Musk has done nothing wrong and everyone sees this sham for what it is," the report quoted Musk's attorney Alex Spiro as saying.
"As the SEC retreats and leaves office — the SEC's multi-year campaign of harassment against Mr. Musk culminated in the filing of a single-count ticky tak complaint against Mr. Musk under Section 13(d) for an alleged administrative failure to file a single form — an offense that, even if proven, carries a nominal penalty," he added.
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The SEC had also sued Musk in the past, such as for his "funding secured" tweet in 2018 which indicated he had planned to take Tesla private. Both Musk and Tesla had to pay fines of $20 million.