The U.S. Securities and Exchange Commission sued billionaire Elon Musk on Tuesday, saying he missed a 2022 deadline to disclose his large stock position in Twitter and was able to underpay for additional shares as a result.
Musk, who bought Twitter in October 2022 and renamed it X, had started amassing shares earlier that year. His ownership amounted to more than 5% by March, requiring him to file a disclosure report. The SEC says the report was 11 days late, allowing Musk to "underpay by at least $150 million” for shares purchased before he disclosed his stake.
Musk’s lawyer, Alex Spiro, said the lawsuit “is an admission by the SEC that they cannot bring an actual case” since Musk has “done nothing wrong," The Associated Press reports. He called the lawsuit a “sham."
“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 tack 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,” Spiro added.
Musk and the SEC have gone to court two other times, The New York Times reports. One of those involved his social media musings about taking Tesla private. Another was an attempt by the SEC to compel Musk to testify as part of an investigation into his purchase of Twitter.
The latest legal tangle could be unraveled when President-elect Donald Trump takes office. SEC chair Gary Gensler, a Biden appointee, is stepping down Monday. Trump has tapped Paul Atkins, a former SEC commissioner under President George W. Bush, to lead the agency.
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