Tech billionaire in his sights
US Securities and Exchange Commission sues Musk over Twitter takeover
It has been known for years that Elon Musk was too late in reporting that an important holding mark had been exceeded when he bought Twitter. The investigation has now resulted in a lawsuit by the stock exchange supervisory authority.
The US Securities and Exchange Commission has sued tech billionaire Elon Musk in connection with his stock purchases in the 2022 takeover of Twitter. The accusation: Musk did not make it public in a timely manner that his shareholding exceeded the five percent mark – and was therefore able to buy more shares cheaper. The SEC conducted a lengthy investigation into the case.
SEC: $150 million saved by violating rules
The tech billionaire began buying Twitter shares on the market at the beginning of 2022. The SEC points out in the complaint that its shareholding reached five percent on March 14, 2022. According to US rules, he would have had to make this public within ten calendar days. However, Musk only announced on April 4th – eleven days late – that he already held nine percent. The stock price then jumped 27 percent, the SEC pointed out.
The agency analyzed Musk’s purchases and concluded that he got off more than $150 million cheaper as a result of the late mandatory disclosure. However, the shareholders who sold their shares to him during this time would have suffered financial damage. The SEC demands that Musk repay the sum – plus an additional penalty.
SEC gets new leadership under Trump
Musk’s lawyer Alex Spiro countered that the tech billionaire “did nothing wrong.” In a statement to the financial service Bloomberg, he also spoke of a years-long “campaign” by the SEC against Musk.
It is unclear how the lawsuit will proceed. Musk is a close confidant of Donald Trump, who will be sworn in as the next US president on January 20th. And with the change in the White House, the SEC will also have new leadership. The previous boss, Gary Gensler, has already announced his retirement that day. It is therefore conceivable that the lawsuit may soon be dropped.
Musk spent a total of around $44 billion on the purchase of Twitter, which was completed in October 2022. For the majority of the sum, he sold his shares in the electric car manufacturer Tesla, which he runs. Musk also took out loans worth around twelve billion dollars. After the acquisition, he converted the service into his online platform X.
dpa
Source: Stern
