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The US Securities and Exchange Commission (SEC) has taken legal action against Elon Musk, accusing him of not being upfront about owning 5% of Twitter stock. They’re also claiming he went on to buy more shares at “artificially low prices,” which they say left other shareholders at a disadvantage.
In a press statement released on Tuesday (Jan. 14), the SEC said that Musk saved at least $150 million at the expense of Twitter shareholders by “failing to timely file the beneficial ownership report.”
Musk bought Twitter in 2022 for $44 billion and later rebranded it as X. But before sealing the deal, he purchased a stake in the company, a move that usually requires a public disclosure. The SEC claims Musk waited 11 days past the deadline to reveal his ownership in Twitter.
The lawsuit added: “Because Musk failed to timely disclose his beneficial ownership, he was able to make these purchases from the unsuspecting public at artificially low prices, which did not yet reflect the undisclosed material information of Musk’s beneficial ownership of more than five percent of Twitter common stock and investment purpose.”
Musk condemns SEC lawsuit against him
The billionaire’s attorney Alex Spiro responded to the lawsuit, calling a “sham” and “ticky tak” that “even if proven, carries a nominal penalty.”
Elon Musk’s attorney Alex Spiro in a statement to @ABC News called SEC lawsuit a "sham" and "ticky tak" that "even if proven, carries a nominal penalty” pic.twitter.com/gyNwVigQjg
— Will Steakin (@wsteaks) January 15, 2025
When someone posted about the SEC’s lawsuit on X, Musk didn’t hold back, calling the agency a “totally broken organization.” He added, “They spend their time on s*** like this when there are so many actual crimes that go unpunished.”
Totally broken organization.
They spend their time on shit like this when there are so many actual crimes that go unpunished.
— Elon Musk (@elonmusk) January 15, 2025
Oh Gary, how could you do this to me? 🥹 pic.twitter.com/OoooQI77ZS
— Elon Musk (@elonmusk) December 12, 2024
The SEC reportedly offered to settle the case for $178 million, along with a $40 million penalty and $45 million in interest, as outlined in a letter sent by Spiro to the agency in late December.
Spiro pushed back against the $263 million combined settlement, calling it “exorbitant and unprecedented,” especially since the SEC didn’t claim Musk acted willfully to harm investors.
Musk, meanwhile, had some fun at the SEC’s expense last month. He posted another letter from Spiro to SEC Chair Gary Gensler on X, captioning it, “Oh Gary, how could you do this to me?” In the letter, Spiro accused the SEC of harassing Musk and pressuring him to “either accept a monetary payment or face charges on numerous counts.”
The case might be one of the SEC’s last big moves under the Biden administration. Gensler, who was appointed by President Biden in 2021, is set to step down from the SEC at noon on January 20. Trump, on the other hand, has chosen cryptocurrency advocate Paul Atkins as his pick to lead the agency.
Featured image: Canva
