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US SEC files case against Elon Musk for late disclosure of Twitter stake

The SEC wants Musk to release the profits he made during the process to raise stakes and acquire Twitter to which he was not entitled to and pay a civil fine.

Musk took over Twitter in October 2022 for $44 billion and renamed it as X. (File photo)

The US Securities and Exchange Commission (SEC) has filed a case against billionaire entrepreneur Elon Musk for failing to disclose the purchase of more than 5% of Twitter’s (now X) common stock in March 2022.

The case filed by the SEC in Washington D.C. federal court alleges that the delay in disclosure allowed Musk to continue the purchase of shares of Twitter at an artificially low price which made him underpay by at least $150 million.

The SEC wants Musk to release the profits he made during the process to raise stakes and acquire Twitter to which he was not entitled to and pay a civil fine.

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“Mr. Musk has done nothing wrong and everyone sees this sham for what it is,” Alex Spiro, a lawyer for Musk said, reported Reuters.

Also Read | Musk says US is demanding he pay penalty over disclosures of Twitter stock purchases

As per an SEC rule, investors like Musk need to disclose their ownership in a company if the threshold crosses 5% within 10 calendar days. But the SEC’s complaint contends that Musk waited for 11 days before filing the required disclosure at the SEC.

Till that time, April 4, 2022, Musk already owned 9% of the company and Twitter’s share price surged more than 27% after Musk’s disclosure, the SEC stated.

Musk took over Twitter in October 2022 for $44 billion and renamed it as X.

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