Recently, the SEC (Securities and Exchange Commission) filed a lawsuit against Elon Musk concerning his ownership of Twitter. This legal action has sparked curiosity among many who are eager to understand why the SpaceX founder found himself in this predicament. It is important to note that Musk acquired Twitter back in 2022 for a whopping $44 billion.
Here is the SEC’s lawsuit against Elon Musk explored.
SEC sues Elon Musk over Twitter ownership disclosure
On Tuesday, the Securities and Exchange Commission (SEC) brought a lawsuit against Elon Musk for not correctly declaring his ownership of Twitter, in violation of federal regulations. This omission enabled him to buy Twitter shares at unusually low costs prior to his $44 billion takeover of the platform.
According to a SEC filing, Elon Musk purchased more than 5% of Twitter’s ordinary shares by March 14, 2022. This significant ownership required him to reveal this information within ten days. However, Musk did not disclose it on time and shared the details only on April 4, 2022, which was eleven days late.
In simpler terms, the lawsuit claims that since Elon Musk bought Twitter shares at relatively lower prices, he allegedly shortchanged investors by approximately $150 million.
In statements made to several news sources, Alex Spiro, Musk’s legal representative, described the SEC lawsuit as a “fraudulent” and “baseless” action. He further asserted that it demonstrated the SEC’s inability to present a valid case against his client, who he insisted had “committed no wrongdoing.
Elon Musk has not shied away from criticizing the SEC in several of his posts. Recently, he referred to the SEC as a “tool used for political underhandedness” and an “institution weaponized for such purposes.
On the next day, he posted a snapshot of a missive his attorney had penned to SEC chair Gary Gensler on date X. Gensler subsequently announced his resignation from his position on January 20, following Donald Trump’s pledge to dismiss him upon taking office. This document exposed that the SEC had requested Elon Musk to reimburse an unspecified amount to them as part of a settlement for his Twitter stock acquisitions, or else face multiple charges.
Today, he characterized the agency as an “entirely dysfunctional institution.” He emphasized that their attention on his case was misdirected and argued that they ought to be concentrating on numerous other unsolved crimes instead.
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2025-01-15 11:41