Elon Musk would have harmed the shareholders of Twitter in more than US$150 million by delaying disclosure of his growing stake in the company while preparing a takeover bid, according to a lawsuit filed by the United States Securities and Exchange Commission (SEC). The complaint was filed a few days before the start of the Trump administration.
According to the SEC, Musk did not report in a timely manner that he had acquired more than 5% of Twitter shares in early 2022, which would have boosted the share price. The regulator argues that this delay allowed Musk to acquire shares at artificially low prices, harming investors who sold during that period. Finally, Musk spent US$44 billion to buy the social network.
“Due to the delay in disclosure, shareholders who sold their shares did so at prices below their true value, suffering significant financial losses,” maintains the civil lawsuit filed in federal court in Washington, DC.
Alex Spiro, Musk’s lawyer, said the action is “an admission” that the SEC cannot present a “real case,” because Musk “has done nothing wrong and everyone sees this farce for what it is.”
“The SEC’s multi-year campaign of harassment against Mr. Musk culminated in the filing of a single-count shoddy complaint against Mr. Musk under Section 13(d) for alleged administrative failure to file a single form, a crime that, even if proven, carries a nominal penalty,” Spiro said in a statement.
The regulator is investigating Musk’s investment in Twitter from 2022, pressing him to explain why he had not disclosed his involvement in Twitter in the correct time frame.
SEC lawyers asked Musk to pay more than $200 million in Decembers to settle allegations that he had not properly disclosed his investment in Twitter, according to a letter from his lawyers sent to the agency last month and reviewed by Bloomberg News.
In the letter, Spiro argued that the SEC seeks financial compensationbut does not accuse Musk of having acted deliberately or with the intention of deceiving investors. The SEC, for its part, declined to comment on the case.
The file is titled Securities and Exchange Commission v. Musk, under number 25-cv-00105, and is filed in the United States District Court for the District of Columbia, in Washington.
Elon Musk’s link with Donald Trump
Musk, the richest person in the world, has become one of Donald Trump’s biggest supporters and closest advisors in recent months. The president-elect tasked Musk, along with Vivek Ramaswamy, with a broad government spending-cutting initiative. Musk has also joined the president-elect in talks with foreign authorities.
Source: Ambito
