Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
The US markets watchdog has filed a lawsuit against Elon Musk alleging that he failed to disclose that he had built up a stake in Twitter, allowing him to buy shares at “artificially low prices”.
The Securities and Exchange Commission (SEC) lawsuit alleges that Tesla’s billionaire boss saved $150m (£123m) on stock purchases as a result.
Under SEC rules, investors whose holdings exceed 5% have 10 days to report that they have exceeded that threshold. Musk did so 21 days after the purchase, according to the document.
In a social media postMusk called the SEC a “totally broken organization.”
He also accused the regulator of wasting time when “there are so many real crimes that go unpunished.”
“Musk’s violation resulted in substantial economic harm to investors,” the SEC complaint said.
In a statement emailed to BBC News, Musk’s lawyer Alex Spiro described the lawsuit as a “sham” and “a campaign of harassment” against his client.
Twitter’s stock price rose more than 27% after Musk went public with his stock purchase on April 4, 2022, the SEC said.
Musk ended up purchasing Twitter for $44 billion in October 2022 and has since renamed the platform X.
The complaint was filed by the SEC in federal court in Washington, DC. on Tuesday.
The lawsuit also asked the court to order Musk to forfeit “unfair” profits and pay a fine.
SEC chief Gary Gensler announced in November that he will resign from his position when Donald Trump returns to the White House on January 20.
That was after Trump said he planned to fire Gensler on the “first day” of his new administration.
Under Gensler’s leadership, the SEC clashed with Musk, who is a close ally of the president-elect.
But Musk had run-ins with the SEC long before Gensler took office.
In 2018, the regulator accused Musk of defrauding investors by claiming he had “funding secured” to take Tesla, the electric car company he runs, private.
He later settled the charges, resigned as chairman of the company’s board of directors and agreed to what was called a Twitter babysitter: limits on what he could write on social media about the company.