The SEC accuses Elon Musk of illegally acquiring Twitter shares at artificially low prices by delaying the public disclosure of his significant ownership stake.
Elon Musk , the CEO of both Tesla and SpaceX, acquired Twitter for $44 billion in late 2022. He subsequently rebranded the platform as X in the following year. On Tuesday, the Securities and Exchange Commission (SEC) filed a lawsuit against Musk, alleging that he violated securities law by purchasing Twitter shares at artificially low prices.
The SEC's complaint states that before the acquisition, Musk had amassed a stake in Twitter exceeding 5%, which would have legally required him to disclose his holdings to the public within 10 calendar days. However, Musk reportedly delayed this disclosure for over 10 days, allowing him to acquire shares at a lower price than he would have if the information had been public.According to the SEC, Musk's delayed disclosure enabled him to underpay for shares by at least $150 million. The lawsuit also alleges that Musk's actions constitute securities fraud, as he failed to disclose his substantial ownership in Twitter, thereby influencing the decisions of other shareholders and potentially putting them at a disadvantage. The SEC seeks a jury trial and demands that Musk disgorge his unjust enrichment, along with a civil penalty. Musk, through his lawyer Alex Spiro, vehemently denied the allegations, characterizing the lawsuit as a 'sham' and the result of a 'multi-year campaign of harassment.' Spiro asserted that Musk has 'done nothing wrong' and claimed the SEC's action was an admission that they 'cannot bring an actual case.' This lawsuit comes amidst a period of heightened scrutiny surrounding Musk's business practices and public persona. He has been the subject of numerous legal battles and controversies in recent years, including a separate civil lawsuit filed by the Oklahoma Firefighters Pension and Retirement System, which accuses him of deliberately concealing his investments in Twitter and his intentions to acquire the company
Finance Law ELON MUSK TWITTER SEC SECURITIES FRAUD TAKEOVER ACQUISITION SHARE PRICES
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